Punitive duty on gold at airports.
The degree of vigilance has increased at international airports in India and a punitive fine is being imposed to prevent the easy entry of gold, which is in keeping with Union Finance Minister P. Chidambaram's Budget directives.
The new rule which came into effect from April 1, 2013 after P Chidambaram's budget announcement says if a passenger has been abroad for a year or more, then he or she can carry jewellery up to a prescribed limit.
For men, the prescribed amount is gold jewellery worth ` 50,000 and for women the prescribed carrying amount is gold jewellery worth ` 1 lakh. Earlier, the limits were gold worth ` 10,000 for men and worth ` 20,000 for women. Interestingly, this was done so that people weren't harassed at airports by over zealous Customs officials.
The fearful spectre of a bloated current account deficit due to rapidly growing gold imports hadn't dawned on Indians till then.
Taxes ramped up
In order to contain the fallout of people sneaking in gold, the level of punitive taxation was ramped up significantly. For those who have not resided in a foreign country for over a year the passenger will have to declare the jewellery at customs and pay a 35 per cent duty fee along with a 3 per cent education cess, making it an effective duty rate of 36.05 per cent.
After paying the total duty, the passengers are allowed to take the jewellery from the Customs Bonded Warehouse. The Customs and Excise Board's rate earlier was ` 750 per 10 gm plus the education cess which was spelt out in the Union Budget 2012- 13.
Passengers who do not declare the jewellery could get into trouble with customs officials if caught. The other option for an inbound Indian passenger is to leave the gold jewellery with customs against a detention slip. On exiting India, the passenger must produce that detention slip at the airport to reclaim the gold and carry it out of the country again.
After witnessing a spurt in smuggling in the last few months, customs officials have become vigilant and stop passengers carrying jewellery over the prescribed limit.
In June alone customs officials seized gold worth ` 3.14 crore. and almost 10 people were arrested in different cases for smuggling gold into the country.
A passenger travelling from Dubai to India recently was stopped at the airport. " I had to attend a wedding so I was carrying jewellery. The officials did not allow me to take the jewellery with me unless I paid duty. The second option I had was to deposit the jewellery with them," she added.
The 43- year- old had to hand over most of her jewellery in exchange for a detention slip which would later allow her to re- export her jewellery.
Sources say officials have witnessed cases of women hiding jewellery under their burqas or other garments. Some cases are as bizarre as hiding gold bars in the rectum and other body cavities, or even as staple pins punched into corrugated boxes. The smuggling of gold, especially from the Gulf region, has increased in recent months owing to the new restrictions imposed on importing the yellow metal. For starters, the rate of import duty on gold, which has been increased twice by the government since January, and was at 8 per cent in the first week of June, is double of what it was.
In a few cases, officials are within their rights if they confiscate the jewellery. " The passenger can reexport the confiscated jewellery can be re- exported," sources said.
SMUGGLING THE YELLOW METAL
June 19, 2013: After receiving specific information, customs officials intercepted a passenger coming from Bangkok at IGI Airport. Nothing was found during baggage and body checks. However, after an X- ray of the passenger, it was found that he was carrying six gold bars in his rectum.
June 19: Two more passengers arriving from Bangkok were stopped by customs officials. They were carrying gold bars weighing 2 kg in TV stands.
June 16: A passenger travelling from Dubai was intercepted at IGI Airport. Approximately 6.4 kg gold, worth ` 1.67 crore, was seized from him.
He had hidden the bars in a metal belt he was wearing.
June 9: Gold staple pins worth ` 19.6 lakh were found punched into food processor and corrugated boxes being carried by a passenger coming from Dubai.
June 9: Another person returning from Dubai was held for smuggling gold jewellery worth ` 50,000 wrapped around his legs.
June 9: Four unclaimed gold bars weighing around 0.5 kg were recovered from a washroom at IGI airport.
May 25, 2013: An Afghan national was intercepted at IGI Airport while carrying gold bangles and white gold chains worth ` 40 lakh.
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