Gold prices set to rise

Finance Minister Pranab Mukherjee on Monday broke hearts of fairer sex by increasing import duty on gold bars, but tried to be even handed by raising income exemption limit for women by Rs 10,000 and by exempting excise on branded jewellery.

Presenting the Union Budget 2009-10, Mukherjee announced increasing import duty on gold bars from Rs 100 per 10 gram to Rs 200 per 10 gram, while other forms of gold (excluding jewellery) is increased from Rs 250 per 10 gram to Rs 500 per 10 gram.

Gold prices rose by Rs 100 per 10 gram in the Delhi Bullion Market immediately after Mukherjee announced the decision to increase import duty. Mukherjee, however, kept import duty on gold and silver jewellery unchanged.

The customs duty on silver has also been increased from Rs 500 per kg to Rs 1,000 per kg. The duty on gold and silver has not been reviewed since 2004 even though prices have increased manifold, the finance minister said.

He further said the revised rates would also apply to gold and silver, including ornaments that are not studded, when imported by a bonafide passenger as baggage.

On the other hand, Mukherjee announced excise duty exemption on branded jewellery. "I fear that my proposals relating to gold and silver on customs side would somewhat dent my popularity with women. I propose to salvage this by fully exempting branded jewellery from excise duty".