Opposition slams gold tax cuts in Budget, points to surge in imports

The Congress on Saturday, 27 July questioned the economic logic of the overall taxes on gold being effectively halved in the budget.

The Opposition party's remarks came after Kotak Mahindra AMC managing director and CEO Nilesh Shah reportedly urged Union finance minister Nirmala Sitharaman to keep a watchful eye on any surge in India's gold import bill in the wake of the customs duty cut and rising international prices.

In a post on X, Congress MP and general-secretary (communications) Jairam Ramesh said Nilesh Shah was a very respected name in the financial world and also a member of the prime minister's Economic Advisory Council.

"Unlike other members who speak on all issues but the economy, Mr Shah sticks to matters relating to the economy," he said.

Shah's latest comment on gold imports needs to be reflected upon seriously, Ramesh asserted.

"In FY 2023-24 India's gold imports totaled USD 45.4 billion, rising by almost 30 per cent from the previous year. It is hardly debatable that gold imports add very little to economic growth. Yet, the 2024/25 budget reduced import duty on gold from 10 per cent to 6 per cent," Ramesh said.

"Combined with the cut in the Agriculture Infrastructure and Development Cess, the overall taxes on gold (including GST) have effectively halved, from 18.5 per cent to 9 per cent. What is the economic logic?" the Congress leader asked.