Prices of precious metals may decrease as the Union Budget on Monday proposed to reduce the customs duty on gold and silver. Jewellers’ associations in the city said the price of 22-karat gold may dip by at least ₹100 per gram.
According to the Union Budget, gold and silver attracted customs duty of 12.5% now. As it was increased from 10% in July 2019, the cost of the yellow metal saw a steep increase.
Various jewellers’ associations have welcomed the Budget announcement and said the industry’s two-year demand had been fulfilled.
B. Govindan, chairman (south zone), All India Gem and Jewellery Domestic Council, said the customs duty had been brought down to 7.5%. But, the government proposed agriculture infrastructure and development cess of 2.5% on gold and silver. “We expect the price of 22-karat gold to fall by ₹100-₹110 per gram. This announcement may boost the business that had dropped by a minimum of 40%-50% due to the pandemic,” he said.
Jewellers said it would discourage unaccounted sales of precious metals. N. Ananthapadmanabhan, a jewellery retailer, said jewellery stores in the city could witness an increase in business by 10%. With the customs duty on finished synthetic gemstones hiked from 7.5% to 15%, the indigenous industry would be revived and more people would get jobs.
Goldsmiths, who were severely affected during the pandemic, are set to benefit.
Jayantilal Challani, president, Madras Jewellers Association, said the retail sales were returning to pre-COVID-19 levels after relaxation of lockdown restrictions. Jewellery showrooms may witness an increase in footfalls in the coming months. The cut in customs duty may also discourage gold smuggling.
