Union Budget 2023: Import duties, electronic gold and more!

The Union Budget of India is the annual budget of the Republic of India. The Government presents it on the first day of February so that it could be executed before the beginning of the new financial year in April.

Top jewellery retailers of the country shared mixed reactions to Union Budget 2023 announced by Finance Minister Nirmala Sitharaman.

Custom duty on metals: gold, silver and platinum

All India Gems and Jewellery Domestic Council (GJC) has been urging for reduction in customs duty of gold over the past many years.

However, the customs duty on silver dore bars has been increased to be brought at par with the yellow metal and platinum in this budget.?

While maintaining the Customs duty for gold at 10 per cent, finance minister Nirmala Sitharaman proposed to increase the import duty on silver dore, bars and articles to 10 per cent to align them with that on gold and platinum.

Currently, the basic customs duty on silver dore is 6.1 per cent, while on semi-manufactured items it is 7.5 per cent.

What is custom duty?

Customs duty, a type of indirect tax, is charged on all imported commodities and some items that are exported outside of the country. Customs taxes are imposed on the import and export of commodities all over the world in order to generate income and/or protect domestic institutions from foreign competitors.

Physical to digital gold

On a positive note, the Budget also announced that the conversion of physical gold to Electronic Gold Receipt will not attract any capital gains tax. Thus, providing an overall digital boost to the industry and promoting investments in the electronic equivalent of gold.?

What is capital gains tax?

Any profit or gain that arises from the sale of a ‘capital asset’ comes under the category ‘income from capital gains’, and hence you will need to pay tax for that amount in the year in which the transfer of the capital asset takes place.?

Lab-grown diamonds

The finance minister also proposed a cut in import duty on seeds used to make lab-grown diamonds with a view to boosting domestic manufacturing.