Gold arrivals on the rise, both legally and illegally

While gold imports into the country have increased, so has the entry of the yellow metal through illegal routes.

The Directorate of Revenue Intelligence (DRI), the intelligence wing of the Central Board of Excise and Custom, has seized over 70 kg of gold in the last few days. Last weekend, DRI officials seized 40 kg of gold in five cases at Delhi, Bangalore and Kozhikode airports.

DRI officials intercepted 30 passengers on a Singapore flight and traced 1 kg gold each concealed in their rectum. Gold and silver in any from, other than gold ornaments, is not part of duty free allowances. There are also restrictions on how much gold a passenger can import as a part of his/her baggage.

A passenger of Indian origin coming from abroad is permitted to bring 1 kg gold provided he or she is arriving after staying overseas for a period not less than six months and paying import duty. A 6-per cent duty plus education cess of 13 per cent is levied on gold bars (other than

tola bars). Any other form of gold (barring ornaments) attracts duty at the rate of 10 per cent plus education cess of 3 per cent.

DRI officials said that the number of passengers using both legal route and illegal route to bring in gold is increasing. The passengers bringing in the gold through the illegal route are mere carriers and get some money for doing it. But, once they are arrested, prosecuted and convicted, they could face imprisonment up to three years.

Legal imports

Revenue officials also expect gold imports to rise in February. The total import in January alone was around 40 tonnes against an average of 20-25 tonnes in the previous months. They claimed that under the 80:20 scheme introduced on August 14, 2013, the entitlement for gold import has increased. This was leading to increase in imports. However, bullion merchants have a different take. The scheme prescribes merchants to re-export 20 per cent of each gold consignment before ordering for fresh shipments.

The RBI has clarified in February that nominated agencies will not be allowed to import gold in excess of their entitlements in the first or second lot under the 80:20 scheme. “Import of gold in the third lot onwards will be lesser of the two — five times the export for which proof has been submitted or quantity of gold permitted to a nominated agency in the first or second lot,” the central bank had said in a notification.

Bullion traders see this as a stifling move. At the same time, they allege that trade authorities are delaying gold procurement request submitted along with proof of export. But, Government data shows a different picture.