CNBC-TV18 Impact | Govt cuts gold duty drawback rate to fix mismatch with import duty

The government on Friday (August 23) cut the gold duty drawback rate to address a mismatch with the revised import duty. This comes after CNBC-TV18 reported that changes in duty drawback rules were not notified following the reduction in gold and silver import duties.

According to the new notification, for gold jewellery, the duty drawback rate has been reduced from ₹704.1 per gram of net gold content (with a purity of .995 or more) to ₹335.50 per gram.

Also Read: Govt forgets to notify changes in duty drawback rules after cutting gold and silver import duty

The rate for silver jewellery and other silver items has been cut from ₹8,949 per kilogram (.999 purity) to ₹4,468.10 per kilogram, ensuring consistent rates across silver products.

The duty drawback rates are intended to reimburse exporters for the customs duties paid on imported inputs, ensuring that goods intended for export are not saddled by domestic taxes.

These rates have been adjusted to correspond to the changes made to import duties applicable on gold and silver in the budget.

At the time, drawbacks were not reduced correspondingly, which resulted in a mismatch that allowed gold and silver importers to bring in the precious metals at a lower price but claim a higher drawback upon export. This fixes that mismatch.

(Edited by : Ajay Vaishnav)