Gold import loses sheen for travellers.

The cases of gold smuggling detected at the airport continue to rise, even as the quantity of the yellow metal brought by travellers eligible to carry it while returning home has declined over the past few months, according to customs sources.

The principal reason, it seems, is the drop in the price of gold together with higher import duty which leaves travellers little incentive to invest in the precious metal.

Officials of the Air Intelligence Unit (AIU) of the airport customs said, some months ago it was a trend among passengers returning home to bring gold and pay the applicable duty. (Passengers, who have lived abroad for more than six months, are allowed to bring in 1kg of gold after paying customs duty.)

"After paying the applicable duties these passengers would earn a clean profit of up to Rs3 lakh per kilogram of gold," said Milind Lanjewar, additional customs commissioner (airport customs).

Import by air travellers has dropped from about Rs43 crore in December 2013 to Rs15 crore in February 2014, and AIU officials believe it would have be even less in March. The price of gold in India has fallen significantly from about Rs31 lakh a kg to about Rs27 lakh a kg today, while the rate abroad (mainly Dubai, where travellers purchase gold) has climbed a little above Rs25 lakh.

Also, the import duty has been hiked from eight per cent to 10 per cent. So, the incentive for import of gold has reduced to less than Rs1 lakh, officials said. But these rates have not had any impact on the smuggling syndicates, as anyway they do not pay duties. With gold always in demand, these smugglers make a good profit.

This is reflected in the 458 per cent increase in gold smuggling recorded by the AIU in the 12 months to March 2014. "So, while importing gold is not as attractive for passengers as before, it still is for the smuggling syndicate," said A Suri, custom commissioner (airport).

An official explained that detection of smuggling had improved with the installation of closed circuit television cameras in the washroom areas where dutiable items were seen to change hands to avoid detection.

Source : dnaindia.com