Congress Questions Economic Logic Behind Halved Gold Taxes

The Congress party raised concerns over the halving of overall taxes on gold in the recent budget. This follows Nilesh Shah's, Kotak Mahindra AMC MD and PM’s Economic Advisory Council member, comments urging vigilance on India's gold import bill surge due to reduced customs duty and rising international prices.

The Congress party raised questions on Saturday regarding the economic rationale behind halving the overall taxes on gold in the latest budget.

The remarks from the opposition came after Kotak Mahindra AMC Managing Director and CEO Nilesh Shah reportedly advised Union Finance Minister Nirmala Sitharaman to be vigilant about any increase in India's gold import bill, following the customs duty cut coupled with rising international gold prices.

In a post on X, Congress General Secretary Jairam Ramesh highlighted that Shah is a highly respected figure in the financial sector and also a member of the Prime Minister's Economic Advisory Council.

''Unlike other members who discuss a range of issues, Mr. Shah focuses strictly on economic matters,'' Ramesh stated.

Ramesh emphasized the importance of Shah's recent comments on gold imports.

''For FY 2023-24, India's gold imports totaled USD 45.4 billion, an increase of nearly 30 per cent from the previous year. It's clear that gold imports contribute minimally to economic growth. Despite this, the 2024/25 budget reduced import duty on gold from 10 per cent to 6 per cent,'' Ramesh noted.

''With the cut in the Agriculture Infrastructure and Development Cess, the overall taxes on gold, including GST, have effectively been halved—from 18.5 per cent to 9 per cent. What is the economic logic?'' the Congress leader questioned.

(With inputs from agencies.)