Author: Paul Ploumis
19 Mar 2015 Last updated at 08:10:39 GMT
NEW DELHI (Scrap Monster): The latest data released by the country’s Trade Ministry indicates that seizure of smuggled gold into the country has risen alarmingly during the initial ten months of the current fiscal year 2014/15. The total number of seizures touched 3,412 during the ten-month period from April ’14 to Jan ’15, significantly higher when matched with the total seizures of 2,450 during the entire year previous fiscal.
The total worth of gold seized by the Customs and Directorate of Revenue Intelligence amounted to Rs 931.55 Crore during April to January period current fiscal. The value of seized gold during the ten-month period has already exceeded the value of seized gold during the previous three years put together. The seized gold during 2013/14, 2012/13 and 2013/12 valued at Rs 686.99 crores, Rs 104.62 crores and Rs 43.87 crores respectively. However, Commerce and Industry Minister Nirmala Sitharaman added that estimates regarding total gold smuggled into the country were not available at the moment.
The gold imports into the country surged significantly during 2011/12 and 2012/13, which in turn inflated the country’s Current Account Deficit (CAD). This had forced the government to lift the import duty on gold from 2% to as high as 10%. The heavy gold import duties triggered gold smuggling acts in the country. The higher duties made smuggling more profitable despite risk of being caught in the act. The higher number of seizures is attributed to the increased vigil by Customs and DRI officials at airports.
Despite huge rise in gold smuggling, the Indian government had refused to lower the tax on gold imports. Instead, it had announced a bunch of gold deposit and gold monetization schemes in an attempt to liquidate huge stashes gold held in Indian households. With CAD under control, the industry hopes that the government may soon lower the import duty on gold.