New Delhi: The Government of India is likely to lower existing import duty on gold from 10% to 6%, reports CNBC-TV18 quoting agencies.

This even as there were on-record comments from the government as early as December declining any proposal to cut duty on gold. Speaking to CNBC-TV18 on the development, Sanjeev Bhatia, CFO of PC Jewellers said this would be a pleasant surprise as it has been a long outstanding demand of the jewellery industry.

The duty had been raised to 10 percent straight from 1 percent and since been increasingly distorting the price parity between domestic and international prices, he said. The reduction in duty will not only benefit consumers but also effectively discourage smuggling, he noted.

The company will look to pass on benefits from the lower prices, he added. On whether this move will help in sprucing up demand, he said demand has started picking up due to seasonal factors but real benefit of duty cut on demand will only be seen once the wedding season concludes.