COMMODITY GOLD MARKET UPDATES: The Central government plans to lower the import duty on gold from 7.5 percent to 12.5 percent in July, which gave grey market operators an incentive to smuggle gold and sell it for cash to avoid paying duties, government and industry officials source said.

With this cut, The precious Gold metal, could lift retail sales by making it cheaper ahead of the peak demand season and support global prices. Also, it might restart local gold refineries' activities, which nearly suspended refining for last 2 months as they could not compete with grey market operators. 

The centre is considering bringing the effective gold rate to below 12 percent. The proposal is being discussed. The current effective tariff on gold is 18.45 percent, which comprises a 12.5 percent import charge, a 2.5 percent infrastructure development cess for agricultural purposes, and additional taxes.

The government increased the basic import duty on gold from 7.5 percent to 12.5 percent in July, which gave grey market operators an incentive to smuggle gold and sell it for cash to avoid paying duties.

An official at the Ministry of Commerce reportedly said it was in favour of reucing the import duty on gold.

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