Centre doubles the import duty on gold, silver; move is criticised as retrograde
ECONOMY – POLICY
The Centre has doubled the effective tax paid on the import of gold and silver to a total of 18.4% from the previous 9.2% with effect from 13th May 2026.
According to sources in the government, the decision was taken against the backdrop of the impact of the West Asia crisis on India’s current account deficit (CAD).
The CAD is the margin by which a country’s total imports of goods, services, and transfers exceeds its exports.
However, industry players and experts said this “retrograde” and “blunt” decision will not only encourage a shift to smuggling but also have other negative effects on employment.
Previously, the basic customs duty on gold and silver stood at 5%, with a 1% Agriculture Infrastructure and Development Cess(AIDC), and a 3% Integrated Goods and Services Tax (IGST) rate on the total assessable value of the imports, which includes the cost, insurance, and freight price, and the applicable basic customs duties, taking the effective import tax to about 9.2%.
Now, the customs duty has been hiked to 10%, and the AIDC has become 5%, taking the effective tax rate, including the IGST, to about 18.4%.
