Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
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ROLE OF INDIAN GOVERNMENT<br />
In summary, when Customs duty has been around US$ 25 per oz, unofficial imports have tended to surge. At the US$ 16<br />
per oz level, the incentive to import gold unofficially has been undermined.<br />
State sales tax<br />
Most State sales taxes are now 1%. In recent years, however, some States have sometimes reduced the sales tax on gold<br />
bullion to levels below 1% in order to attract more gold imports. For this reason, Ahmedabad (Gujarat) and Jaipur<br />
(Rajasthan) have acted as important regional and national distribution centres for gold bullion. In 2002, Maharashtra<br />
(Mumbai) and Haryana (Gurgaon) have also reduced their State sales taxes on bullion to less than 1%.<br />
In Ahmedabad, the current level is 0.5%. In Jaipur, dealers authorised between 14 January and 30 September 2001, were<br />
allowed to pay a lump sum of Rs 1 crore (around US$ 200,000) and Rs 10 lakhs (around US$ 20,000) per annum in order<br />
to sell an unlimited quantity of gold without paying any additional State sales taxes. The scheme has been extended until<br />
March 2003.<br />
The Government has expressed an intention to standardise sales taxes across India through the introduction of a standard<br />
minimum Value-Added Tax (VAT). The current target date is April 2003.<br />
Municipal taxes<br />
Some cities also apply local taxes in addition to the State sales tax. For example, Mumbai currently levies on gold bullion a<br />
small octroi (entrance into the city) tax.<br />
GOLD JEWELLERY<br />
State sales taxes<br />
The State sales tax varies by State, and is subject to change. It normally ranges between 1% and 4%.<br />
Sales taxes on studded jewellery in some States can be higher.<br />
Municipal taxes<br />
As in the case of gold bullion, gold jewellery can also be subject to one or more local taxes.<br />
INDICATIVE COST OF GOLD IMPORTS 1990 - 2001<br />
Year Imports for Mumbai gold Approx. Cost in real terms at 1990 prices<br />
domestic use prices * value<br />
Tonnes Rupees Billion Rs Billion Rs % +/- Index<br />
per 10 g 1990 = 100<br />
1990 176 3,399 59.822 59.822 - 100<br />
1991 155 4,044 62.682 55.080 - 8 92<br />
1992 262 4,255 111.481 87.642 + 59 147<br />
1993 239 4,384 104.778 77.499 - 12 130<br />
1994 296 4,652 137.699 92.415 + 19 154<br />
1995 384 4,798 184.243 112.070 + 21 187<br />
1996 408 5,191 211.793 118.188 + 5 198<br />
1997 642 4,556 292.495 152.421 + 29 255<br />
1998 688 4,182 287.722 132.469 - 13 221<br />
1999 651 4,333 282.078 124.045 - 6 207<br />
2000 673 4,520 304.196 128.461 + 4 215<br />
2001 672 4,462 299.846 122.136 - 5 204<br />
Source: Imports for domestic use: see section on “<strong>Gold</strong> Supply and Demand”; includes official and unofficial imports. * Mumbai gold prices include<br />
import duty and local taxes.<br />
The cost of annual gold imports for domestic use increased in real terms by 204% between 1990 and 2001.<br />
After a decline of 13% in 1998, the cost in real terms has remained largely static.<br />
Its actual cost in 2001 (672 tonnes) was approximately Rs 299 billion (US$ 6.2 billion).<br />
In 1990 (176 tonnes), the actual cost was Rs 60 billion (US$ 3.5 billion).<br />
AN INTRODUCTION TO THE INDIAN GOLD MARKET 31