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Majority of gold from Dubai and Singapore smuggled into India |
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CHENNAI: With demand for gold increasing in the country, majority of gold from Dubai and Singapore are being smuggled into India due to the price differentiation, a senior Directorate of Revenue Intelligence official said.
DRI authorities over the recent past have seized several kilos of gold in Southern cities and last week 31.75 kg of gold valued at Rs 8.43 crore was seized at Madurai airport in Tamil Nadu.
The officials said due to the attraction towards purchase of gold in India, gold from Dubai and Singapore has become "attractive" for smugglers to buy and transport it to the country.
Gold smugglers or couriers of "smuggling gang" disguise themselves as genuine passengers to escape customs officials, he said.
"Dubai and Singapore are the major supply centres for gold market and most of the travellers in South India come from these two places via air, while majority of gold from Sri Lanka is smuggled through the sea route," he said.
The rise in gold smuggling was due to increase in import duty and restrictions on the procurement of gold, making it an "attractive" option, the official, who did not wish to be named, said.
"Increase in import duty of 10 per cent on gold brought through legal channels and restrictions in procurement has made its smuggling attractive, thereby witnessing an increase in gold smuggling," he said.
The official said differences in exchange rate and the import duties across countries make gold a preferred metal for smuggling compared to other goods.
Giving an example, he said "there is a price difference of about Rs five lakh per kilogram of gold purchased in India as against in Dubai after paying the customs duty."
"With the price differentiation of Rs 2.30 lakh per kg along with an additional 10 per cent customs duty, there will be Rs five lakh price difference between the gold in Dubai and India for legally importing it," he said.
According to him, it is for these reasons smugglers take up various methods to evade paying customs duty during smuggling.
"Any passenger who brings gold into the country is required to declare the gold to Customs at the airport and pay customs duty in foreign exchange, a facility mainly provided for passengers returning after working for sometime," he said.
The official said for import of gold, one kg of gold is allowed under the Customs Act, 1962, on payment of customs duty in foreign exchange.
On the reasons for gold being an attractive option for investments, he said demand from Indian consumers continues to grow.
Citing a World Gold Council estimate, he said Indian demand for gold was 604 tonnes in 2014 and in the first two quarters of 2015, it was at 268 tonnes.
He said the nature of the unorganised gold jewellery industry, lack of transparency in commercial transactions besides any intervention for proper accounting are reasons for stashing smuggled gold in the market.
Along with India, Sri Lanka and Bangladesh have joined hands to curb illegal trade in gold smuggling by imposing high duty and restrictions, the official said.
"DRI noticed that sea coast off Tamil Nadu was used for smuggling activities from June 2013. A number of cases have been registered against smugglers and the agents."
Observing that a large chain of persons were involved in the smuggling of gold, he said, "fifty-four persons involved in smuggling of gold have been arrested during the financial year 2014-15."
Source : economictimes.indiatimes.com
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