Not considering any proposal to cut gold import duty, says finance ministry

The finance ministry has said it is not considering any proposal to slash import duty on gold in view of country's current account deficit (CAD) position.

"At present, there is no proposal under consideration to reduce the import duty on gold, taking into account the likely impact on the Current Account Deficit," Minister of State for Finance JD Seelam told the Lok Sabha in a written reply.

CAD had touched a record high of $88.2 billion in 2012-13.

Through 2013, the government hiked import duty thrice to 10 per cent on import of gold in wake of high CAD which in turn was impacting the value of the rupee. The Reserve Bank of India (RBI) too imposed a series of curbs to restrict gold imports.

Following the measures, CAD is likely to fall below $50 billion in the current financial year ending March 31.

In the first half (April-September) of current financial year, CAD narrowed to $26.9 billion (3.1 per cent), from $37.9 billion (4.5 per cent) in the first half of 2012-13.

Gold imports, which had peaked to 162 tonne in May, came down to 19.3 tonne in November after the government hiked the import duty thrice.

In value terms, gold and silver imports in April-December period declined 30.3 per cent to $27.3 billion from $39.2 billion during the same period a year earlier.

The government collected Rs 7,590 crore revenue in form of import duty on gold during April-December 2013. In 2012-13 fiscal, the collection was Rs 10,463 crore.

Authorities have admitted that curbs were leading to gold smuggling. There has been about 1-3 tonne of gold smuggled into the country every month following the restrictions imposed on shipment last year.

Finance Minister P Chidambaram had recently said the restrictions on gold imports will be reviewed by March end.