Shares of gems and jewellery companies fell sharply on the Bombay Stock Exchange after Finance Minister Nirmala Sitharaman proposed hike in import duty on gold. While presenting the Union Budget 2019-20, Nirmala Sitharaman said import duty on gold and precious metals to be raised to 12.5 per cent, from the current level of 10 per cent. The existing import duty on gold is 10 percent which is now revised to 12.5 percent.

In addition, gold prices attract GST of 3 percent. Hence the present total tax incidence on gold would be about 15.5 percent this will lead to higher prices for gold in the country. Weighed down by the development, PC Jeweller share prices declined nearly 5 per cent to hit an intra-day low of Rs 40.35 apiece on the BSE. The stock was currently trading at Rs 40.45, down 4.71 per cent.

Among other gold-related stocks, share of state-owned MMTC was down 2.22 per cent at Rs 24.20 per share. Titan Company declined 1.73 per cent to Rs 1,268.05 in intra-day trade. Tribhovandas Bhimji Zaveri share was down 4.38 per cent lower Rs 42.60, while Thangamayil Jewellery tumbled 3.95 per cent to Rs 323.05 on the BSE.