Spoiler: It’s not about the wedding season.
Last night, while most of us were winding down, the Government of India quietly tweaked something called the tariff value of gold.
From $1,037 to $1,064 per 10 grams.
A small-sounding move, but one with real consequences.
If you’re wondering why the government is playing with obscure customs formulas instead of changing the import duty outright — well, that’s the clever part. Let’s break it down.
What is Tariff Value — and Why Should You Care?
The tariff value is a benchmark price set by the government to calculate import duty.
It doesn’t matter what the invoice or actual cost of gold is — customs will use this tariff value when applying taxes.
So, if the tariff value rises, importers pay more tax, even if global gold prices remain unchanged.
In effect:
“We don’t care what you paid. We’ll tell you how much we’ll tax you on.”
A Brief History of Gold Duty in India
India’s obsession with gold is well documented. But when it turns into a balance-of-payments problem, the government steps in.
- 2013: Import duty was raised sharply to manage the current account deficit.
- 2022: Import duty touched 15% — one of the highest ever — but it backfired. Smuggling surged.
- 2024: Duty was cut to 6% to curb illegal imports and boost legal channels.
But cutting duties meant losing tax revenue. So the government used a workaround:
Raise the tariff value. That way, the rate looks lower, but the tax base is higher — and total collections don’t suffer.
Why the Hike Now?
A few reasons:
1. Global Gold Prices Are at All-Time Highs
Gold is now trading around $2,320/oz or ₹71,000 per 10 grams.
That’s nearly a 20% increase in one year. With rising demand and uncertainty, central banks and investors are hoarding gold again.
2. Revenue, Without Political Noise
Raising import duty makes headlines and gets political.
Raising tariff value flies under the radar but has the same effect on collections.
3. Anti-Smuggling Strategy
A market-linked tariff value reduces the incentive to under-invoice or smuggle gold.
It narrows the gap between official and grey market rates — making legal imports more viable.
How Much Has It Increased Over Time?
| Date | Tariff Value (Gold per 10g) |
|---|---|
| Jan 2024 | $899 |
| Mar 2024 | $961 |
| Apr 15, 2025 | $1,037 |
| May 1, 2025 | $1,064 |
That’s about an 18% increase in four months — in line with the global price surge.
Who Loses?
- Jewellery importers, who now pay higher effective taxes
- Consumers, who face marginally higher prices
- Smugglers, who lose their cost advantage
But there are winners:
- The government, which earns more without hiking the official duty
- Legal importers, who face a more level playing field
- The broader economy, as illegal flows reduce and transparency improves
The Larger Message
This move isn’t just about gold — it’s about how the government fine-tunes trade and tax policies.
A tweak in tariff value is like a tap on the brake: it slows things down just enough without jolting the entire system.
And right now, the government’s message is simple:
“We’ll let you import gold, but we’re making sure we earn our share.”
https://taxinformation.cbic.gov.in/view-pdf/1010370/ENG/Notifications
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