GST adds sheen to gold smuggling

gold demand under gst

Gold smuggling is on the rise at the Rajiv Gandhi International Airport with carriers from Dubai, Kuwait, Muscat, Bangkok, Singapore and Colombo flocking  Shamshabad to do a brisk business with the local market.

The customs registered 120 cases and seized 43.3 kg gold till December this financial year.

The smuggling syndicate is routing the yellow metal from across the globe to the country to sell it in the local market with a profit margin reaching up to Rs 2 lakh per kg gold.

Their new found love is attributed to the GST on gold. The government imposed a 3 per cent GST on gold and jewelleries, on the other hand, passed on the GST on gold and the making charges onto customers.

“Purchasing gold through the legal way entails taxes and makes jewellers accountable. To avoid these, some jewelleries source it from smugglers,” customs officials said.

There is a price difference of Rs 3,000 to Rs 4,000 on a tola of gold in Dubai and India.

“Most of the cases are from the Middle East as carriers are easily available there due to the huge Indian diaspora. There is a rise in the gold smuggling this year for various reasons and GST could be one of them,” pointed out a customs official.

Mr M. Gopi Krishna, a member of the Telangana Gems and Jewellery Association, said that the high import duty on gold is encouraging smuggling,” Mr M. Gopi Krishna said.

“The gold is cheaper in the international market. If imported through the legal route, a 10 per cent of the total value plus other taxes have to be paid. To prevent smuggling, the import duty should be brought down to 4 per cent,” he suggested.

According to him, 30 to 40 per cent of gold in the local market is sourced from smugglers.

On an average, on every kilogram of gold, the smuggler from Dubai save up to Rs 2 lakh.

The carriers are lured with a fat commission and a free air travel ticket. Increased security at the airport has forced the smugglers to shift their destination to the airports in the neighbouring countries. Later, the gold is shipped to India via the sea route.

Forex smuggling a challenge to cops

Smuggling of foreign currency is another challenge. The directorate of revenue intelligence, customs, police and intelligence agencies monitor the foreign currency smuggling. Foreign currency is pumped out of the country to procure gold.

The currency is brought into the country by those returning home from foreign lands for vacation or winding up their businesses.

In recent cases, the counter intelligence units of the state police traced gangs involved in foreign currency.

Last year, officials seized foreign currencies, including US dollars, Australian dollars, UAE dirhams, Saudi and Omani riyals.

Source:https://www.deccanchronicle.com/nation/crime/170118/gst-adds-sheen-to-gold-smuggling.html

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