• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
BW Businessworld

Vigil To Check Gold Smuggling After Import Duty Hike

Photo Credit :

Fearing spurt in attempts to smuggle gold into the country, financial intelligence agencies and customs department are keeping extra vigil and minutely scanning suspected passengers and commercial consignments.
Officials of the Directorate General of Revenue Intelligence (DRI), mandated to check smuggling and evasion of customs duty, are coordinating with other agencies' staff posted at major transit points, including airports and international borders, to check gold smuggling and have alerted their field formations to remain more vigilant.
Sources said the customs department is scanning credentials of suspected cargo coming from Gulf countries and other nations like Malaysia to foil any bid to smuggle precious metal inside the country.
Officers of the Customs Overseas Intelligence Network posted abroad have also been asked to keep a hawk eye on any suspected consignment originating from there, they said.
"There have been some frequent incidents of gold smuggling this year. All officials posted at airports, cargo stations and land borders are keeping extra vigil to check any such incidents," a DRI official said.
Officials said the recent hike of 10 per cent in customs duty for gold by Finance Ministry may see increased attempts of smuggling of the yellow metal.
The duty ongoldand platinum was raised from 8 per cent to 10 per cent, while the levy onsilverwas hiked by 4 per cent this week, according to a Finance Ministry notification.
Ten gram gold is being sold at about Rs 29,825 in Delhi's bullion market.
Owing to huge domestic demands, the import ofgoldhad gone up by a huge 87 per cent from 205 tonnes in April-July 2012 to 383 tonnes during the corresponding period this year.
In value terms, the increase was 68 per cent - from Rs 56,488 crore to Rs 95,092 crore.
Gold Consumption At 310 Tonnes In Q2, Highest In 10 Yrs
India's consumption of gold rose to 310 tonnes in the second quarter ended June, highest in the last 10 years, despite government curbs to restrict imports to rein in burgeoning current account deficit, a World Gold Council (WGC) report said Thursday.
Much of the demand was met by stocks that had been built up to healthy levels following the April price drop. Imports more than doubled to 338 tonnes in April-June of this calendar year, it said. Gold consumption stood at 181.1 tonnes in the same quarter last year.
"Consumers in India showed continued strong appetite for gold, with recent government measures to curb demand having had little impact on the quarters figures. Consumer demand was 310 tonnes, up 71 per cent on last year," the WGC said in its latest report.
According to WGC India Managing Director Somasundaram PR, "Gold demand in Q2 was best in the last ten years." 
The fall in the gold price last April resulted in an increase in jewellery demand by more than 50 per cent to 188 tonnes in Q2 this year from 124 tonnes in the year-ago period, while bar and coin consumption reached a record high at 122 tonnes from 56.5 tonnes in the review period, he said.
The introduction of restrictions on payment terms for gold imports in May and an increased import duty in early June to 8 per cent created uncertainty in the market but had a "limited impact on end-user demand," he added.
India, the world's biggest buyer of gold, has been trying to curb imports of the yellow metal, which is the second biggest imported item after crude oil. On 13 August, the government raised import duty on gold for a third time in eight months to 10 per cent from 8 per cent.