Budget 2012: Jewellery to cost more with hike in gold, platinum rate

Gold and platinum will be costlier as the government has proposed doubling the import duty on these precious metals.

"I propose to increase basic customs duty on standard gold bars; gold coins of purity exceeding 99.5% and platinum from 2% to 4% and on non-standard gold from 5% to 10%," Finance Mukherjee said in his Budget speech.

Industry experts are of opinion that this could lead to an increase of 3-4% in the prices of gold.

"The gold will get costlier by 3-4% as jewellers will pass on customs duty and excise duty on to the consumers," Gems and Jewellery Export Promotion Council Chairman Sanjay Kothari said.

The basic duty on gold ore, concentrate and dore bars for refining has also been double to 2%.

The excise duty on refined gold has been increased from 1.5% to 3%.

To prevent round-tripping, it is proposed to impose basic customs duty of 2% on cut and polished, coloured gem stones at par with diamonds.

"One of the primary drivers of the current account deficit has been the growth of almost 50% in imports of gold and other precious metals in the first three quarters of this year. I have been advised to strengthen the steps already taken to check this trend for better results," Mukherjee said while announcing these proposals.