Banks, retailers conceal gold import, says Comptroller and Auditor General

Thiruvananthapuram: The Comptroller and Auditor General has found that major private banks conceal the lion’s share of gold, diamond and platinum they import. Dhanlaxmi Bank is the biggest 'under-invoicer', declaring less then three percent of its total imports of precious metals. Under-invoicing of imports was detected in Federal Bank, and South Indian Bank, too. Not just banks, big gold retailers like Malabar Gold Ornaments, Chemmannur Gold Refinery and Aishwarya Jewel Crafts also have suppressed a large part of the precious metals they had imparted.

The CAG Report, which was tabled in the Assembly on Monday, said that six dealers in four assessment circles, half of them banks, had imported gold, diamond and platinum amounting to Rs 4,191.16 crore against which only Rs 496.69 crore was conceded. “The suppression of import purchase worked out to Rs 3,694.46 crore and the resultant short levy of tax, interest and penalty worked out to Rs 126.70 crore,” the report added. Principal accountant general Amar Patnaik said that the findings do not provide the real picture as the test check was carried out only in four assessment circles.

The audit noted that the assessee that had benefitted the most was The Dhanlaxmi Bank Limited from whom the short levy of tax was Rs 118.40 crore (including interest and penalty for the years 2011-12 to 2013-14). While it imported Rs 1918.69 crore and Rs 1393.31 crore worth of gold and platinum in 2011-12 and 2012-13 respectively, it declared just Rs 51.55 crore and Rs 71.92 crore for these fiscals. For 2013-14, though Dhanlaxmi Bank imported gold worth Rs 258 crore, it did not declare any of this.

Audit collected the data of import of gold, diamond and platinum into the Country by the dealers from the Director General of Systems and Management, Central Excise and Customs, New Delhi and cross checked the import details furnished by the dealers. Mr Patnaik, however, refused to elaborate on the gold imports of banks. “This requires further investigation,” he said. RBI has allowed banks to import gold to provide gold loans to jewellers. Bankers say that gold loan works out cheaper than a rupee loan.