Jewellery stocks jump 14% after govt cuts basic custom duty on gold, silver

Jewellery stocks jump 14% after govt cuts basic custom duty on gold, silver

Shares of gold and jewellery retailers jumped 14 per cent on Tuesday after Finance Minister Nirmala Sitharaman said the government will reduce the basic customs duty on the yellow metal and silver to 6 per cent.

The scrip of Tribhovandas Bhimji Zaveri surged 13.86 per cent to close at Rs 155.30 apiece, Titan Company zoomed 6.63 per cent to Rs 3,468.15, Rajesh Exports rallied 6.32 per cent to finish at Rs 316.35 on the BSE.

PC Jeweller's shares jumped 5 per cent to settle at Rs 74.16 — also its upper circuit limit, Senco Gold climbed 4.75 per cent to Rs 987.55 and Kalyan Jewellers India rose 4.53 per cent to end at Rs 552.85 on the exchange.

The 30-share BSE Sensex benchmark slipped 73.04 points or 0.09 per cent to close at 80,429.04.

On Tuesday, the government slashed customs duties on a range of products, including gold, silver, and critical minerals, to cut input costs, increase value addition, promote export competitiveness and boost domestic manufacturing.

The basic customs duty on coins of precious metals, gold/silver findings, and gold and silver bars was reduced to 6 per cent from 15 per cent. It was cut to 5.35 per cent from 14.35 per cent for gold and silver dore.

On platinum, palladium, osmium, ruthenium, and Iridium, the levy was cut to 6.4 per cent from 15.4 per cent.

The gems and jewellery exporters have been demanding to cut duties on precious metals to boost exports and manufacturing for the last several years.

"My proposals for customs duties intend to support domestic manufacturing, deepen local value addition, promote export competitiveness, and simplify taxation while keeping the interest of the general public and consumers surmount," Finance Minister Nirmala Sitahraman said.

"To enhance domestic value addition in gold and precious metal jewellery in the country, I propose to reduce customs duties on gold and silver to 6 per cent and that on platinum to 6.4 per cent," she added.

The minister also proposed to undertake a comprehensive review of the rate structure over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction in disputes.

"Customs duty on gold and silver has been reduced to 6 per cent that may lead to a decline in domestic prices and perhaps lift demand.

"The existing duty on gold and silver is 15 per cent which comprises 10 per cent of basic customs duty and 5 per cent as Agricultural Infrastructure Development cess," Hareesh V, Head of Commodities at Geojit Financial Services, said.