The Central Board of Excise and Customs (CBEC) issued notification in this regard reducing the gold import tariff value to $391 per 10 grams. The import tariffs are being slashed from the existing $401 per 10 grams. Meanwhile the import tariff value of Silver has been lowered from the existing $575 per kilogram to $551 per kilogram.
The government move to lower the import tariff value is in track with the weakening gold prices in the global and domestic markets.
The international gold prices have seen a sharp slide in recent days, falling the most in three weeks. The U.S. Fed decision to terminate its bond-purchase programme has led to sudden drop in gold demand as a hedge against inflation. Spot gold prices fell as low as $1,195.70 per ounce.
Meanwhile, gold in India touched the lowest levels witnessed earlier in 2010. MCX gold traded at Rs. 26,143 per ten grams on Saturday. Analysts foresee more weakness in gold prices with further strengthening of U.S. dollar. The domestic gold prices are likely to fall to Rs.24, 500 per 10 grams by end of the year. In international market, gold is expected to fall to $1,075 to $1,120 levels. On the other hand, silver prices have collapsed by nearly 8% during the month of October itself.
Tariff value is the base price on which the customs duty on imported gold or silver is calculated and it further helps prevent under-invoicing.