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Seventy-five percent of the gold seized by Customs officials at the Sardar Vallabhbhai Patel International Airport (SVPIA), Ahmedabad in 2013-14 has been after August 2013, when the Centre hiked customs duty on the yellow metal to 10 per cent to curb the surging imports and burgeoning Current Account Deficit (CAD), data provided by Customs department shows.
Customs duty on gold, silver and platinum was hiked to 10 per cent in August 2013 in an attempt to contain surging imports and burgeoning CAD, a decision that was expected to rake in an additional Rs 4,830 crore to the Central exchequer.
While 6.13 kg (6,136.78 grams) of gold was seized at SVPIA in 2012-13, the quantity of yellow metal seized in 2013-14 rose to 28.50 kg (28,509.53 grams), an increase of four times.
Of the 28.50 kg gold seized seized in 2013-14, 21.40 kg gold (close to 75 per cent) was seized between October 2013 and March 2014, the data suggests. The highest seizure of 13.10 kg was in February 2014 while in the last month of the financial year (March 2014), 4.99 kg of yellow metal was seized by the Customs department.
In October 2013, 2.32 kg gold was seized while 0.98 kg gold was seized in November 2013.
Between April 2013 and July 2013 before the import duty on gold was raised to 10 per cent, Customs officials had seized 7.1 kg gold at SVPIA.
The number of offences registered in 2013-14 have also increased by 15 times from 2012-13, the data highlights.
While two cases were lodged by the Customs department in 2012-13, the offences rose to 30 in 2013-14.
The value of gold seized in 2012-13 was Rs 1.76 crore which rose to Rs 8.13 crore in 2013-14.
Attributing the rise in smuggled gold to high profit margins, a bullion industry player in Ahmedabad said, “Importers gain high profit margins on bringing gold illegally into the country. After rise in customs duty on gold in August last year, there has been increase in smuggling cases.”He also expected the next government at Centre to reduce import duty on gold to curb smuggling.
“We expect the next government to reduce import duty on gold and other metals to curb illegal entry of gold into the country,” he added.
The hike in customs duty on gold in August 2013 was the third time that the Union government has raised the duty on gold last year to contain its 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.
Apart from raising the import duty on the metal, the Reserve Bank of India (RBI) made it mandatory for traders to export 20 per cent of the imported gold, thereby creating a supply crunch in the domestic market.
Eighty-seven million tonnes (MTs) of gold was imported into Gujarat in 2013-14, the lowest in the last six financial years, according to Gujarat State Export Corporation Limited (GSECL).
The Union Commerce Ministry had recently written to the Union Finance Ministry to reduce import duty on gold and other metals.
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.
