Government increases duty drawback on gold, reduces for silver

By

Isabelle Crossley

Published
Jul 16, 2020

The central government has increased the duty drawback on gold by 15.6% and decreased the duty drawback on silver by 5% receiving praise from the Gem and Jewellery Export Promotion Council.

The new gold duty drawback rate is now priced at Rs 431.1 per gram, up from Rs 372.9 per gram. This will enable exporters to gain higher returns on duty and taxes paid for the raw materials, against the exported products, the GJEPC announced on its website.

The government had last adjusted the duty drawback rate on gold in January 2020 and felt the need to adjust it due to the steady increase in gold prices added to by the global coronavirus pandemic. 

“The revision in duty drawback rates is a great move by the Department of Revenue, Ministry of Finance,” said GJEPC chairman Colin Shah, the GJEPC reported.

“Duty-free precious metal must be available to exporters so that they can compete in international markets. In view of unprecedented increase in the price of gold in the last couple of months, manufacturers who were exporting jewellery from domestically procured duty-paid gold were finding it unfeasible to execute export orders. The revision in drawback rates will provide much-needed relief to gold jewellery exporters.”
 
The duty drawback rate on silver has been reduced by 5% and now stands at Rs 4,105.6 per kilogram, down from Rs 4,332.2 per kilogram. The Department of Revenue, Ministry of Finance’s notification on the duty drawback rates came into effect on July 15, 2020.