Centre revises Customs duty on precious metals; Puts 5 pc duty on gold, silver, platinum findings

NEW DELHI: The Ministry of Finance has updated the Customs duty rates for various precious metals and jewellery findings, which comes into effect today, May 13.

Under the revised schedule, gold and silver findings will now attract a 5 per cent duty, while platinum findings are set at a rate of 5.4 per cent. The notification also establishes a 4.35 per cent duty for precious metal spent catalysts, a rate contingent upon the strict fulfillment of specified compliance criteria.

The government sharply hiked Customs duties on precious metals like gold, platinum and silver, citing the need to conserve foreign exchange and protect the economy from growing global pressures stemming from the ongoing West Asia crisis.

Import duty on gold and silver has been raised from 6 per cent to 15 per cent, while platinum will now attract a duty of 15.4 per cent, up from 6.4 per cent. The changes also apply to related items such as gold and silver dore, coins, and findings.

Sources in the Finance ministry said the move is aimed at moderating non-essential imports at a time when geopolitical tensions are driving volatility in crude oil markets and disrupting international shipping routes. As a major oil importer, India faces heightened risks of a widening Current Account Deficit (CAD) and inflationary pressure if foreign exchange outflows are not carefully managed.

“India’s foreign exchange resources must be prioritised towards essential imports such as crude oil, fertilisers, industrial raw materials, defence requirements, critical technologies, and capital goods,” sources in the Finance Ministry said, adding that precious metals, while culturally significant, are largely consumption and investment driven and involve substantial foreign exchange outflows with relatively limited industrial linkages.

Finance ministry sources were quick to clarify that the measure is not prohibitory. “It is a carefully calibrated and proportionate intervention designed to encourage moderation — not a ban”, they said, emphasising that consumer choice and market flexibility are being preserved.

The duty hike reverses a reduction made in the Union Budget 2024-25, when duties on gold and silver were cut from 15 per cent to 6 per cent and on platinum from 15.4 per cent to 6.4 per cent, reflecting more comfortable economic conditions at the time. Finance Ministry sources indicated that duty rates have historically moved in both directions depending on macroeconomic conditions, and a future reduction remains possible if external pressures ease.

The decision also aligns with the broader economic discipline advocated by Prime Minister, who has urged citizens to reduce avoidable foreign expenditure, conserve fuel, and support national economic resilience through responsible consumption.

Finance Ministry sources described the move as preventive and forward-looking, aimed at reducing vulnerability to external shocks before pressures intensify further, rather than resorting to harsher tools such as quantitative import restrictions.

The notification provides a precise definition for the items subject to these new rates to ensure clarity in trade and taxation. “For the purposes of this entry, gold, silver or platinum findings mean a small component such as hook, clasp, clamp, pin, catch, screw back used to hold the whole or a part of a piece of jewellery in place”, the official notification stated.

For the import of spent catalysts or ash containing precious metals, the lower rate of 4.35 per cent is tied to rigorous end-use requirements. The importer must adhere to the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022, to qualify for this rate.

“Provided further that the importer at the time and place of clearance: — (a) gives an undertaking to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, regarding percentage of precious metals contained in spent catalyst or Ash containing precious metal being imported and to the effect that the said goods are imported for recovery of precious metals,” the Ministry of Finance directive noted.

The regulatory framework also mandates environmental clearances for these specific imports. The Ministry has made it mandatory for importers to provide documentation proving that the materials are being handled for legitimate recycling or recovery.

The importer “produces a certificate from the Ministry of Environment, Forest and Climate Change before the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, permitting import of spent catalyst or Ash containing precious metal for recovery or recycling purposes,” the document explained. (ANI)