India imposes restrictions on imports of plain gold jewellery, Will it affect prices?

Mumbai: The Indian Government has imposed restrictions on imports of plain gold jewellry on Wednesday. The decision came after the govt found dealers misusing some loopholes in the trade policy.

According to the official government notification, the import of articles of gold has now been put under the restriction category from the free category with immediate effect. Now, an importer will need permission of a licence from the government for importing these gold products.

However, a notification by the Directorate General of Foreign Trade (DGFT) has also revealed that the gold imported under the India-United Arab Emirates Comprehensive Economic Partnership Agreement would be allowed without any license.

The government decided to take this action after it came to be known that the importers have been getting gold jewellery from Indonesia, , which was never a gold supplier to India in the first place, without paying any import taxes by using a policy flaw for the past few months.

The importers are reportedly sourcing 3-4 tones of plain gold jewellery from Indonesia without paying any import taxes.

The Gold dealers generally have to pay a 15% tax on gold imports in India. But, it seems they have used the loophole in the policy to avoid paying taxes.
Now, with the new policy in place, they can take advantage of this policy flaw anymore.

The decision will help reduce import of non-essential items.