The gold rush to the State continues with the Customs seizing 319 kg of the yellow metal valued at ₹87 crore in over 881 cases, including those at the four international airports in the State, till the end of January in the current year. The figures could be even more staggering by the time this financial year draws to a close, as more hauls are recorded regularly.
Conservative estimates put gold smuggling into the country at 200 tonnes annually, out of which 78-80 tonnes reach Kerala directly or indirectly. In comparison, the legitimate gold importing and recycled gold in the country is estimated at a minuscule 18 tonnes.
“Import of gold by banks by deferring duty payment has emerged as a major area of concern as this gold is supposed to be exported after value additions and may, in turn, end up smuggled in,” Sumit Kumar, Customs Commissioner, told The Hindu.
Three types of diversion
Banks give such gold to players like jewellery exporters leading to three kinds of diversions — unaccounted gold lost during manufacturing of jewellery, the possibility of bringing in gold and exporting something else, and an exporter exporting to own firm.
“The working of the gold industry has to be subjected to a major examination. There is a thin line between allowing legitimate import and not giving absolute freedom. Enforcing a zero duty regime is unlikely to end the smuggling of gold overnight, not to mention the risk of depletion of country’s foreign exchange reserves owing to the increased demand for gold,” Mr. Kumar said.
Profit for smugglers
Evasion of customs duty of 10% and Goods and Services Tax of 3% on the value of gold smuggled in is the profit margin for the smugglers. That margin is huge considering the 80-odd-tonne gold being smuggled into the State.
A warning
The Customs is all set to convene a meeting of all major players in the gold industry in Thrissur shortly. “The idea is to get a better picture of the industry’s working and to send out the message that we are fully seized of their illegal activities and that unless they cooperate with us they could be in for a very tough time,” said Mr. Kumar.