Buzz of gold import ban spreads panic among traders.

MUMBAI: Trade body Indian Bullion & Jewellers Association (IBJA) has created a flutter among some of its 2500 members by informing them through a text message that the government might ban imports of gold into the country until the end of the current fiscal year (FY17) and advance the last date of deposit of old notes for jewellers to November 15 to crackdown on black money.

"We hear from certain circles of this possibility (gold import ban and advancement of deposit date) though nothing official is out yet," said Surendra Mehta, national secretary, IBJA. "The association is supportive of the government's fight against black money and has informed its members of the possibility of such action. We have asked our members to support the government wholeheartedly."

The move of a likely ban on imports was termed "draconian" by one trade member, even though Mehta tried to downplay its significance.

"Already, 600 jewellers have received notices from the tax department to disclose their sales till November 8. We are aware that certain members of the trade are importing gold only to sell the same against old notes at a hefty premium. So, if the government wants to stop this malpractice it might consider a ban on imports. Alternately, if it directs all jewellers to deposit or declare old notes by November 15, it would not necessarily consider banning imports."

The government demonetised 500 and 1000 rupee notes effective midnight of November 8 and said that holders of old notes could deposit them into banks by December end. The likely decision to advance the date for jewellers stems from some of them selling gold even now against old notes at exorbitant sums, enabling people to get rid of black money while lining their own pockets.

A jeweller said that "black sheep" in the trade were selling 10 gms gold for as much as Rs 50,000 against the extant market price of Rs 30,000. Accepting 500 and 1000 notes, except by certain categories of merchants, is illegal. New notes of Rs 2000 have hit the market and soon Rs 500 new notes will also be available.

Source : economictimes.indiatimes.com