Chennai: High import duty and foreign trade restrictions resulted in a doubling of gold smuggling at the Chennai airport last year. The year 2013 saw 139 gold cases compared to 74 cases in 2012.
The year also saw passengers hiding gold in unique ways including hiding it inside their mouth and rectum and mixing it with mehendi powder. Officials at the city airport seized Rs 27.78 crore worth smuggled gold in 2013 compared to Rs 8.38 crore worth gold in 2012.
Singapore, Colombo and Dubai were the three countries from where the passengers frequently smuggled in gold. Among the 139 cases, 43 were from Colombo, 46 from Singapore, 19 from Dubai and the remaining from Malaysia, Abu Dhabi, Hong Kong, Kuwait and Muscat.
Airport and Air Cargo customs commissioner Sanjay Kumar Agarwal said that the latest trend is that passengers have also started bringing 1 kg gold authentically by paying 10 per cent duty as there is a huge premium on gold now.
However, he added that the increase in gold smuggling was due to a lot of curbs in regular imports and foreign trade regulations. The commissioner said that it paid to conceal gold, as successful smuggling of 1 kg gold would directly give the passenger a head start of Rs 3 lakh that he evaded by not paying customs 10 per cent duty. Further, gold is cheaper in other countries," he added.
A customs official said that hiding gold in the rectum has picked up in the last quarter of 2013. "After September, when government regulations tightened the import of gold, the old carriers returned to work.
Rectum concealment of gold needs a specific kind of body structure," he said. He added that 2013 also saw smugglers trying to sneak in gold by swallowing it in the form of tablets, or hiding it in mixie bottoms, shaving trimmers, emergency lamps and laptops.
"There were also passengers trying to hide gold in a form of small plate in the side cavity of the Pink Chinese globe lock and key," the official added. The year also saw more Sri Lankan women dressed up as brides trying to sneak in gold illegally into India. The customs also apprehended a woman who walked in with an umbrella, whose stem was made of gold.
Next: Take the legal route to import gold
Take the legal route to import gold
S. Sujatha | DC
Chennai: Gold is something that Indians like to buy when they travel abroad. Not only is the price of gold lower in foreign countries when compared to India, people also believe that the gold available here is not as pure as that available in the international market.
Airport and air cargo customs commissioner Sanjay Kumar Agarwal said that no free gold allowance was permitted for normal air passengers returning home after travelling abroad with a tourist visa.
However, the government of India allows free gold into the country from passengers who have resided in foreign countries for more than six months. According to the latest regulations, any Indian or NRI woman can bring gold worth Rs 1 lakh freely into the country. Similarly, a man can bring gold worth Rs 50,000.
They are also permitted to bring gold up to 1 kg, provided they pay the customs duty of 10 per cent plus 2 per cent cess. Further, there is no restriction on the quantity of gold for Indians and NRIs who have stayed for more than a year abroad, but they have to pay a total of 36 per cent baggage rate of duty above the 1 kg limit. For international passengers, there is no free allowance and they need to pay duty.
Agarwal said all these duty structures were applicable only when passengers declare the gold on their own or accept that they are carrying gold when the customs department questions them. "If they fail to declare the gold to customs, it means concealing the metal and the department will take action," he added. If gold has been found concealed, the department will seize it. The passenger has to prove that the gold belongs to him or her. Then he has to pay a fine on goods, which could even amount to 50 per cent of the value.
A penalty of around 10 to 20 per cent on the person would also be charged for hiding the gold. This apart, the person has to pay the actual duty for gold and then take home the goods. If in case the department finds the passenger is a carrier, they will confiscate the gold and allow the passenger to leave only after paying the penalty. In some cases, the passengers are let off if they don't posses enough cash to pay the penalty.
The customs department apprehends passengers when they carry undeclared gold worth more than Rs 20 lakh. "Otherwise, we can only seize the gold and allow the passengers to go free. But we record the cases and when the passenger is caught again, we can arrest him, if he has totally smuggled in more than Rs 20 lakh worth gold," Agarwal added.
However, he said that when women and children bring multiple sets of gold jewellery to attend a marriage function, customs personnel allow them to do so. "Either we ask them to give a bond stating that they will take back the jewels when they travel again or we keep them in our safe and return to them when they leave the country," Agarwal said.
Next: Traders see red in peddlers’ profit rate
Traders see red in peddlers’ profit rate
K. Sreedevi | DC
Chennai: With smuggled gold yielding a neat 15 per cent profit margin to peddlers, gold traders are worried that the trend will only see an uptick in the coming months. Squarely blaming the record duty hike on gold imports imposed this year, jewellers point out that the government move to curb high trade deficit has only backfired resulting in higher sneaking of the yellow metal into the country, affecting legal trade.
"There is a difference of nearly Rs 4 lakh per kg between international and Indian prices. This is has what resulted in a jump in gold smuggling during the last few months," said Jayantilal J. Challani, president of Madras Jewellers and Diamond Merchants Association.
The government imposed a series of duty hikes on gold imports that saw customs duty on standard gold going up from 2 per cent to 10 per cent and also banned trading of gold in special economic zones. RBI, on its part, introduced an 80:20 scheme in July last that mandated 20 per cent of bullion imported to be exported back. All these measures pulled down gold imports to 19.3 tonnes in November from a high of 162 tonnes in May.
"However, this has also resulted in multi-fold increase in gold smuggling even leaving narcotics behind," lamented a senior member of the Gold and Jewellery Exports Promotion Council. As per World Gold Council estimates, about 150-200 tonnes of smuggled gold is reported to have entered India during 2013.
Investors and small-time jewellery making units, who are facing a severe raw material supply crunch in the market, become easy targets of the smuggled metal. "With import curbs reducing raw gold supply by nearly 65 per cent in the market, there is a huge supply-demand gap among traders," Challani said. Due to this supply crunch, many traders are even going slow on our promotions," he added.
