Gold price drops significantly as govt. slash duty by 50 percent

The price of gold significantly dropped by Rs15,900 per tola (11.664 grams) on Monday following the government’s decision to slash the customs duty on the precious yellow metal by half.

According to the Federation of Nepal Gold and Silver Dealers Association, the price of hallmark gold has been set at Rs151,300 per tola for Monday, down from Rs167,200 on Sunday.

The government has reduced the customs duty on gold imports to 10 percent from 20 percent. The decision was taken during a Cabinet meeting on Thursday, according to officials. Through its budget, India reduced the customs duty on gold and silver from 15 percent to 6 percent. In contrast, Nepal had increased the gold customs duty by 5 percent, raising it to 20 percent in the current fiscal year’s budget. This made gold more expensive in Nepal and cheaper in India, leading to smuggling of the yellow metal.

According to the Federation the imbalance in customs duties due to the open border encouraged illegal trade. To prevent such trade, the Federation had suggested that the customs duty on gold be fixed at 8 percent.