Customs tightens baggage rules for gold

news
07 March 2014

Passengers arriving in the country with gold and gold ornaments will now have to provide detailed information, including source of funds for importing the metal as well as their air tickets, under tightened baggage rules aimed at checking smuggling of gold by inbound Indian passengers.

Accordingly, the baggage receipt issued by the customs will now include the engraved serial number on gold bars and item-wise list of ornaments, a circular issued by the revenue department said.

"Wherever possible, the field officer, may ascertain the antecedents of such passengers, source for funding for gold as well as duty being paid in the foreign currency, person responsible for booking of tickets, etc," it said, adding, the decision is aimed at preventing misuse of the gold import facility.

Customs decided to tighten baggage rules following a spate of incidents of gold smuggling into the country, mostly by passengers arriving from the Gulf countries.

The authorities apprehend that most of the gold is brought unauthorisedly into the country by smugglers using unwary passengers as a conduit. Some smugglers also hire eligible passengers to import gold on their behalf.

The norms have been tightened following "a spurt in import" of gold by eligible passengers through various airports in the recent past across the country.

Eligible passengers are allowed to be import gold up to 1kg by paying 10 per cent customs duty in foreign currency.

Eligible passenger include persons of Indian origin or an Indian returning to India after a period of 6 months of stay abroad.

Gold smuggling increased following curbs imposed by the government and the Reserve Bank on its imports in the wake of a spurt in gold import and a subsequent spike in the country's current account deficit (CAD).

While the restrictions have helped reduce gold imports and CAD significantly, it has given rise to smuggling to meet the pent up demand for gold.

India is currently experiencing an 'acute shortage' of gold, which has resulted a 21 per cent increase in its price in India. Against the listed Comex spot price of $1,350 for an ounce of gold the real price in India is closer to $1635.





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