Gold, silver customs duty up

KATHMANDU, FEB 8: 

The cabinet has revised customs duty on gold and silver fearing a repetition of illegal exports of the precious metals to India owing to differences in the customs duty.

A cabinet meeting held today has increased import duty on gold to Rs 1,500 per 10 grams and duty on per kg silver has been fixed at Rs 4,600.

The bullion traders have been asking the government to jack up customs duty on gold and silver imports to prevent any chances of illegal outflow of the metals to India. “As the customs duty in Nepal was lower than that in India, it would have eventually given rise to illegal exports to India,” according to president of Nepal Gold and Silver Dealers’ Association (Negosida) Tej Ratna Shakya. “The association had officially requested the Finance Ministry and minister to increase the customs duty, especially, of silver.”

The government has fixed duty on gold and silver at Rs 1,000 per 10 grams and Rs 24,000 per kg, respectively, in the budget. But in January, the Indian government has revised the import duty on gold and jacked up to IRs 560 per 10 grams and for silver it was increased from IRs 1,500 to IRs 3,000 per kg.

Negosida has raised an alarm regarding the smuggling of silver rather than gold as the precious yellow metal was relatively more expensive in India than in Nepal.

“If the customs duty was not revised, then once again silver would have been smuggled to India like it was two years back,” cautioned Shakya.”We have even heard that unknown buyers have started purchasing large quantities of silver to exploit the current custom difference situation.”

Last year, the government prohibited traders from importing gold and silver, allowing only commercial banks to do so, as a measure to tackle the heavy deficit in the balance of payments. Fiscal year 2009-10 showed a huge deficit in Balance of Payment account due to huge imports of gold and silver.

The government suspected smuggling of imported precious metals to India as they were relatively cheaper in Nepal due to difference in customs. Following the strict measure, imports of gold and silver went down remarkably and in the last fiscal year imports of gold and silver accounted for only three per cent of the total imports. In the fiscal year 2009-10, imports of gold and silver had accounted for 10 per cent of total imports. 

Ministry of Commerce and Supplies has opened silver imports through open general lice-nse without any quota. But only commercial banks can import 15 kg gold per day.

Source: THT