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A whopping 128 kg of smuggled gold has been seized in Gujarat by the zonal and regional units of the Directorate of Revenue Intelligence (DRI) and the Customs department, the two premier Central agencies responsible for checking illegal import of gold into the country, during the first quarter of the current financial year 2014-15. The seizure is four times the confiscation made by the two agencies in the first quarter of the previous financial year 2013-14.
The value of 128 kg gold seized by DRI and Customs between April and June 2014 stood at Rs 37 crore, while the value of 27.9 kg gold seized by the two agencies between April and June 2013 stood at Rs 8.74 crore.
The high seizure of the yellow metal has been largely attributed to the 10 per cent import duty on gold imposed by the previous Congress-led United Progressive Alliance (UPA) regime in August 2013 in addition to the Reserve Bank of India (RBI) mandate to traders to export 20 per cent of the imported gold.
The hike in import duty on gold was aimed at arresting the yellow metal’s imports, mainly responsible for spurt in CAD, which had touched a record high of 4.8 per cent of the country’s Gross Domestic Product (GDP) in 2012-13. The decision was expected to rake in an additional Rs 4,830 crore to the Central exchequer.
In the first quarter of 2014-15, DRI seized 108 kg gold across Gujarat, up from 21.8 kg it had confiscated in the corresponding quarter of the previous financial year. Two cases were registered and two persons were arrested in the first quarter of 2013-14, while in 2014-15, as many as 16 persons were arrested and eight cases were registered. The value of the yellow metal seized between April and June 2014 stood at Rs 31.5 crore, a rise of five times from Rs 6.14 crore, the value of seizure made between April and June 2013.
At the Sardar Vallabhbhai Patel International (SVPI) Airport, Ahmedabad, Customs officials seized 6.1 kg gold in the first quarter of 2013-14 while 20.3 kg gold was confiscated in the first quarter of the current financial year. The number of cases registered by Customs officials between April and June 2014 also rose by 5 times. While three cases were registered between April and June 2013, the figure rose to 17 in the first quarter of 2014-15.
The value of gold seized by Customs officials from airport in the first quarter of 2013-14 was Rs 2.6 crore which went up to Rs 5.5 crore in the inaugural quarter of the current fiscal. Customs officials arrested four persons between April and June 2013 and 26 persons between April and June 2014.
Attributing the surge in illegal import of gold into the country on high duty on the yellow metal, a gold industry official said, “Rise in import duty on gold is largely responsible for the yellow metal’s smuggling into the country. Moreover, the RBI mandate to traders to export 20 per cent of the imported gold has also created supply crunch in the domestic market. Importers gain high margins on bringing gold illegally into the country, which has forced them to smuggle the yellow metal.”
“Now that the CAD has been brought into control, we expect the government to reduce import duty on gold by at least 2 per cent in the Budget,” the industry official said.
In the first three months of 2014-15, 28.25 million tonnes of gold has been imported so far into Gujarat, according to Gujarat State Export Corporation Limited (GSECL), a public limited company.
After China, India is the largest importer of gold, which is mainly utilised to meet demand from the jewellery industry. Gold is the largest imported item into the country after petroleum.
