Gold Smuggling Is Expected To Come Down Due To Import Duty
Gold smuggling is expected to come down because of import duty, jewelery exporters are stuck due to cess, jewelry is stuck at the port.
Gold will no longer be gold for smugglers. The import duty on gold has been reduced in the budget presented for the next financial year on Monday this week. This is expected to lead to a huge drop in gold smuggling.
However, jewelery exporters are confused because of the cess on gold imports. While taking imported gold, cess is being demanded from them at the port, which is why jewelery exporters are considering leaving gold at the port right now.
In the budget, the 12.5 percent import duty on gold has been reduced to 7.5 percent. But 2.5 percent duty will also have to be paid in the name of agricultural infrastructure cess on gold imports.
Thus there was a 10 percent duty on gold imports. According to bullion experts, this decision will no longer make gold smuggling very beneficial.
According to experts, smugglers will not take a big risk for low earnings. According to Vimal Goyal, a wholesale dealer of Delhi Sarafa Bazar, there will definitely be a huge drop in gold smuggling.
They say that if the import duty of gold remains at eight percent, then the smuggling of gold from India will be completely eliminated.
The government had reduced the import duty of gold to 12.5 percent in the financial year 2018-19. At the same time, many Gulf countries reduced their duty on gold by five percent.
This means that the smuggler earned 7.5% and 3% GST on the sale of gold in India and earned 10.5%. This is the reason why the smuggling of gold in that financial year saw an increase of 67 percent over the previous year.
According to government data, 11,000 kg of gold was smuggled in the last five years. In FY 2019-20, gold worth Rs 858 crore was seized at different airports.
Jewelery exporter dilemma
Exporters said that the duty on gold imported for the manufacture of exportable jewelery is refunded to the exporters.
But due to the cess of 2.5 percent on gold imports, they do not understand whether they will get the cess amount back.
Jewelery exporter Pankaj Parikh said that cess is being demanded from exporters while taking imported gold at Kolkata Port.
Due to this, jewelery exporters are not currently taking gold. However, it is expected that the government will soon issue an explanation for giving relief to exporters.
