Countervailing duty on silver, silver products to check misuse of Indo-Asean FTA

MUMBAI: Those misusing free trade agreements between India and Asean nations to import silverware and medallions at concessional duty, melting the same and selling the silver at a rate that included normal 10 per cent duty, will no longer be able to do so.

Budget has imposed a 12.5 per cent countervailing duty on silver coins, medallions and silver articles. The FTAA allowed import of the aforesaid items at 1 per cent duty. Shady traders would melt the items after importing the same from ASEAN under FTAA and sell the metal for up to 10 per cent higher. The CVD makes such trades unviable.

ET had reported in its edition of May 27 last year how such treaties were being misused in the case of gold.


“The arbitrage these traders enjoyed has ended, and that’s good because it protects the local silver industry,” said Rajesh Khosla, MD, MMTC Pamp.
Also since the government has capped cash transactions at Rs 3 lakh, the tax collected at source for jewellery purchase in cash above Rs 5 lakh stands cancelled.