Kalyan Jewellers, Titan, other jewellery stocks jump up to 6% as FM keeps customs duty on gold, silver unchanged

Kalyan Jewellers, Titan, other jewellery stocks jump up to 6% after FM keeps customs duty on gold, silver unchanged

• Jeweler stocks rose as customs duty on gold and silver imports stayed the same.
• Kalyan Jewellers up 6.5%, Titan up 4%, Senco Gold up 1.5%
• Budget exempts capital gains tax on RBI Sovereign Gold Bonds for original buyers

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The shares of several jewelers surged in trade on February 1 after Finance Minister Nirmala Sitharaman kept rates on customs duty unchanged for import of gold and silver.

Kalyan Jewellers India shares gained more than 6.5 percent to trade at Rs 385.3 apiece, while Titan Company shares jumped over 4 percent to trade at Rs 4,143.5 apiece. Senco Gold shares rose 1.5 percent.

Currently, import of gold in all forms attracts a 6 percent duty, including 5 percent basic customs duty (BCD) and 1 percent agriculture infrastructure and development cess (AIDC). Silver imports are taxed at 6 percent for eligible Indian residents, while others pay 36 percent, comprising 35 percent basic customs duty and 1 percent AIDC. Both metals attract a uniform GST of 3 percent.

The Centre had slashed the customs duty on gold from 15 percent to 6 percent with effect from July 24, 2024.

Although there was some confusion earlier when the Finance Minister Nirmala Sitharaman announced that “the tariff rate on all dutiable goods imported for personal use would be reduced from 20 per cent to 10 per cent,” market experts have clarified that it will not include the import of gold and silver jewellery, or any other precious metals.

“The bullion industry had expected a cut in import duty on gold, GST rationalisation, export incentives and extended credit support. The Budget announced capital gains tax exemption on RBI Sovereign Gold Bonds, applicable only to original subscribers, not to secondary market buyers, while there were no announcements of any meaningful reduction in gold import duty or GST reforms,” said Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Ltd., President of India Bullion and Jewellers Association Ltd. and Chairman at Jain International Trade Organisation.