Gold is highly esteemed in India, serving dual purposes as both an adornment and a means of investment. It represents prosperity and carries great cultural importance. To monitor the flow of gold into the country and its potential effects on the economy, the government imposes customs duties, which act as taxes on imported goods. Hence, comprehending the customs duty on gold in India is essential when it comes to the coveted metal in India.
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Custom Duty on Gold in India
With the release of the most recent Union Budget, the customs duty on gold in India has been explicitly outlined. For individuals purchasing gold bars, the duty has been set at 15%, whereas for gold doré, the rate is 14.35%. When you add 3% Goods and Services Tax (GST), consumers will now be responsible for a total tax of 18.45% when purchasing refined gold.
On the other side, gold refineries will face a significantly higher tax rate of 17.78% for gold doré, in comparison to the previous rate of 13.39%.
Importantly, only specific entities are allowed to import gold bars into India, as permitted by the Directorate General of Foreign Trade (DGFT). These include the below entities:
- Metals and Minerals Trading Corporation Limited (MMTC)
- Project and Equipment Corporation of India Limited
- Gems & Jewellery Export Promotion Council (G&J EPC)
- Handicraft and Handloom Export Corporation (HHEC)
- State Trading Corporation (STC)
- Diamond India Limited (DIL)
- STCL Limited
- MSTC Limited
- Any agency authorized by the RBI.
Understanding these customs duty on gold in India is crucial for both consumers and entities involved in the gold trade.
How Much is Customs Duty on Gold in India?
When it comes to customs duty on gold in India, the rules are clear. Gold and silver findings, as well as precious metal coins, are subject to a 15% import duty. This consists of a Basic Customs Duty of 10%, along with an Additional Duty of 5% under the Agriculture Infrastructure and Development cess, with an exemption from the Social Welfare Surcharge (SWS).
Similarly, for spent catalysts containing precious metals, the total import duty is 14.35%. This consists of a BCD of 10% along with an Additional Duty of 5% under the Agriculture Infrastructure and Development cess, with an exemption from the Social Welfare Surcharge (SWS).
Here is a breakdown:
| Name of Goods | BCD (A) | Additional Duty under AIDC (B) | Total Import Duty (C=A+B) |
|---|---|---|---|
|
Gold and Silver Findings |
10% |
5% |
15% |
|
Spent Catalysts with Precious Metals |
10% |
4.35% |
14.35% |
Here,
- BCD means Basic Customs Duty
- SWS means Social Welfare Surcharge
- AIDC means Agri Infrastructure Development Cess
Impact of Customs Duty on Gold in India
The customs duty on gold bars in India recently gone through a change. While the basic customs duty for gold bars has been reduced from 12.5% to 10%, there has been a noticeable increase in the Agriculture Infrastructure Cess, jumping from 2.5% to 5%. This means the overall tax incidence remains the same.
For silver bars, the scenario is different. The basic customs duty for silver bars has increased from 7.5% to 10%, and the Agriculture Infrastructure Development Cess has also increased from 2.5% to 5%. These show an increase in both the basic customs duty and the cess for silver bars in India.
How Much Duty Free Gold is allowed in India?
When it comes to customs duty on gold in India for jewelry and ornaments, there are exemptions if certain conditions are fulfilled. No customs duty is required if the total weight is less than 20 grams or if the entire value is below INR 50,000. For instance, if the total weight of the gold is less than 20 grams or the value of the gold is below INR 50,000, no customs duty is required.
Passengers who have resided abroad for more than a year also have specific allowances when it comes to bringing gold into India:
- Male passengers can bring up to 20 grams of gold, with a value limit of ₹50,000.
- Female passengers can bring up to 40 grams of gold, with a value limit of ₹1 Lakh.
- The same allowances also apply to children living abroad for more than a year.
Conclusion
When discussing the customs duty on gold in India, it is important to note that there are exemptions that apply to jewelry and ornaments. These exceptions state that no customs duty will be charged if the weight of the gold is less than 20 grams or the value is below INR 50,000. Furthermore, individuals who have been residing abroad for more than one year are also entitled to specific allowances. Having a thorough understanding of these conditions is crucial for a smooth and hassle-free experience with customs duty on gold in India.
Frequently Asked Questions (FAQ)
For passengers returning to India after residing abroad for over a year, there’s a duty-free allowance for jewelry in their bona fide baggage. A gentleman passenger can bring up to twenty grams with a value cap of fifty thousand rupees, while a lady passenger can bring up to forty grams with a value cap of one lakh rupees.
If the quantity is less than 20 grams, no customs duty is required. For amounts between 20-100 grams, a 3% customs charge applies to the value of the gold bars. However, if the quantity exceeds 100 grams but is still below 1 kilogram per passenger, a 10% customs charge is levied on the value.
Duty-free limit for bringing gold into India applies specifically to gold jewelry, not to gold coins, biscuits, or bars. Any of these forms exceeding the allowed limit will incur duty charges.
Dubai’s reputation as the gold city is well-earned, drawing expats due to its low gold rates and top-notch quality. The UAE’s tax-free status further sweetens the deal, ensuring no VAT or sales tax on gold purchases. However, it’s essential to be aware of the limits set by the Central Board of Indirect Taxes and Customs on bringing gold from Dubai to India. For male travelers, the cap is 20 grams (up to a value of Rs 50,000), while females can bring up to 40 grams (up to Rs 100,000).
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