Import duty on gold up; additional levy on fuel exports

New Delhi, July 1

The Centre has hiked the import duty on gold to 15 per cent from 10.75 per cent to check the current account deficit (CAD) and rising import of the yellow metal. Besides, it slapped an export tax on petrol and diesel after some refineries made “phenomenal profits” by exporting fuel at the cost of domestic supplies, and imposed a cess of Rs 23,250 per tonne on crude oil produced locally.

The government said there would be no impact of the cess on crude and other duties on the domestic fuel prices. The cess of Rs 23,250 per tonne (by way of special additional excise duty) has been imposed on crude so that the Centre could take a slice of the windfall gains being made by domestic crude producers due to the sharp rise in prices.

At last year’s production level of close to 29 million tonnes, this will translate into an annual revenue of Rs 66,000 crore to the government.

A Rs 6 per litre tax on export of petrol and ATF and Rs 13 per litre tax on export of diesel is effective from July 1, the Finance Ministry said. The tax is to deter companies such as Reliance Industries and Rosneft-based Nayara Energy from preferring overseas markets over domestic supplies.

Union Finance Minister Nirmala Sitharaman said “phenomenal profits” that refiners earned by shipping overseas led to the new taxes. “We don’t grudge people earning profits. But if oil is not being available… rather exported with such phenomenal profits. Extraordinary times do require such steps,” she said.

On hike in import duty on gold, Sitharaman said the import of yellow metal put stress on the forex reserves. “The demand for gold is inelastic. If you still want to import, please pay up that much more so that the country can have some revenue,” she said.

There has been a sudden surge in imports of gold. In May, a total of 107 tonnes of gold was imported and in June also, it was significant. The surge in gold imports is putting pressure on the current account deficit, the Finance Ministry said. — TNS

Rising deficit

Import duty on gold up from 10.75% to 15%, will check current account deficit

‘Profiteering’ by cos

Cess on local crude, export tax on fuel to check ‘high profits’ by refineries