Govt raises customs on gold by Rs 1,900 per tola

ShareSansar, Sept 13:

The government has raised the customs duty on gold by Rs 1,600 per ten grams, effectively raising the price of the precious metal by Rs 1,900 per tola.

The move is aimed at checking smuggling of the precious metal to India in huge quantities through the open and porous border between the neighbors after the government there raised the customs on the yellow metal two months ago.

The adjustment was necessary to discourage smuggling, finance ministry has stated. Now gold will be Rs 720 costlier in Nepal as compared to India.

Two months ago, India had raised the customs on gold by a whopping Indian Rupees 2,800 (NRs 4,480) per ten gram to discourage the import in the wake of economic crisis in the country.

Despite the government’s move to raise the customs on gold, the traders have not raised the price.

They have not even collected the previous metal from the bank as the customers are selling off their gold instead of buying—due to ongoing surge in the price of gold in the international market. Commercial banks currently have 300 kilograms of gold in stock.

Nepal Gold and Silver Dealers’ Association has, however, officially mentioned that the price of gold has not been raised as the recently imported stock has not arrived in the market.

They also said that so far they have not been formally notified about the government’s decision to hike the customs on gold. But the finance ministry officials said that the decision was taken after consulting the Nepal Rastra Bank as well as the traders.

It may be noted here that the traders themselves had been requesting the government to raise the customs on gold to contain its smuggling to India.

Now that the customs duty has been adjusted, the traders want the government to allow them to import gold as per the demand in the market.

As per the existing provision, traders can import up to 15 kilograms of gold per day through banks. The traders, however, maintain that the demand is as high as 40 kilogram a day.

The government started to control the bullion market after excessive import of the precious metals such as gold and silver led to a huge account deficit.