Gold, petrol, diesel to weigh on your pocket, courtesy Budget 2019; All you need to know

Finance Minister Nirmala Sitharaman announced a proposal to hike custom duty on yellow metal during Budget 2019 speech. The reaction was sudden and quite impactful on Dalal Street after the Budget presented the hike on Gold. FM Sitharaman said, "Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol and diesel. I propose to increase Special Additional Excise duty and Road and Infrastructure Cess each by one rupee a litre on petrol and diesel. It is also proposed to increase customs duty on gold and other precious metals from 10% to 12.5%."

Commenting on an increase in customs duty on gold and other precious metals, Abhishek Bansal, Chairman, ABans Group of Companies told Zee Business online that, "Import duty on gold has been increased from 10% to 12.5%, which indicates the government’s move to discourage imports of physical gold and promote digital gold in the form of ETF’s, Gold Bonds, etc."

In his forecast going forward, he said that, "Gold demand in India may drop further, as gold prices are already at multi-year highs and jewellery will become unaffordable to small pocket households. The Gems and Jewellery industry received a big setback, as the import duty has been increased on all other precious metals."

Talking on Petrol & Diesel, Bansal said, "The Government has proposed to apply an infrastructure cess and a special additional excise duty of Re. 1 each per litre on petrol and diesel (effectively amounting to Rs. 2 per litre) which will result in higher fuel prices to the end consumers but also contribute towards additional tax revenues for the government."

He added, "According to PPAC estimates, India will consume nearly 28,77,4000 mt of petrol and 97,85,9000 mt of diesel for the year 2019-20."

Talking on Gold hike in customs duty on gold and precious metals, Saurabh Gadgil, CMD, PNG Jewellers; Director and National Vice President, IBJA said Zee Business Online that, "The imposition of a hike in customs duty on gold and precious metals will have a dampening effect on the market."