Niti Aayog Panel asks for gold import duty reduction

By

Isabelle Crossley

Published
Mar 27, 2018

A Niti Aayog committee has headed by the Aayog Principal Adviser Ratan P Watal has asked for a regulatory body for India’s gold industry and a reduction in gold import duty.

The National Institution for Transforming India Committee (Niti Aayog) made a total of 84 recommendations for the gold industry that were grouped into 20 headings. Suggestions also included setting up jewellery parks to encourage local manufacturing, something that the Union Government has been implementing in the textile sector for some time. Setting up such parks would also make mining more viable and transform the domestic gold market, the committee said.

The Niti Aayog committee has also asked for a regulatory body to be set up specifically for the gold industry. This comes as little surprise in the current climate when many jewellery businesses are being investigated for fraud in the wake of the Nirav Modi and Mehul Choksi fraud scandal at the Punjab National Bank (PNB).

Concerning tax, the committee has stated that tax policies should be designed to organise the gold jewellery market, which is currently mostly unorganised. Part of this involves reducing gold import duty. The committee said that organising the market, “can be achieved by taking a decision on rationalising the import duty on gold and gold doré, as that would remove the arbitrage between Indian and international gold prices thus dis-incentivising smuggling.”