New Delhi: India, the world’s biggest bullion consumer, has raised the base import price for gold by 5.7% to $556 per 10 grams and that of silver by nearly 12% to $1,067 per kg, a government statement said on Wednesday.

Base price is the rate at which imports are taxed, irrespective of the purchase price, to prevent under-invoicing.

The move, which could hit annual Indian demand of around 800-900 tonnes of gold, is seen as a measure to raise state revenues as the government struggles to meet its fiscal deficit target due to increasing outlays, including subsidies for fuel and food.

“There is a definite impact on demand due to rise in tax,” said Harshad Ajmera, proprietor of JJ Gold House.

Last month, India hiked its gold import duty by 90% and doubled the tax on silver, sending futures prices higher and hitting shares of jewellers.

Gold on the Multi Commodity Exchange (MCX) was flat at Rs28,098 per 10 grams, while silver also traded steady at Rs56,439 per kg.

Source: livemint.com