India hikes taxes on gold for first time in six years
The decision is part of the federal budget for the year through March 31, 2020. Gold prices in India hit an all-time high after the announcement. Shares of gems and jewelry companies fell sharply into negative territory on the Bombay Stock Exchange.Also on rt.com Global gold fever: India follows Russia & China by boosting bullion reserves
The tax increase may discourage buyers and trim demand in the physical market by ten percent this year, from 760 tons in 2018, according to the All India Gems & Jewellery Domestic Council. The association will request the government to roll back the duty, chairman Anantha Padmanaban told Bloomberg.
“This is very unfortunate and disappointing,” Padmanaban said, adding: “We were expecting a cut in customs duty and this came as a surprise and a shock. This is going to encourage a lot of smuggling.”Also on rt.com India’s gold imports surge as rupee plummets to record low against US dollar
India is the second-largest bullion consumer after China. The country, which imports almost all of its gold, raised the tax on the metal three times in 2013 to control a record current account deficit and stop a decline in the national currency, the rupee.
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