The Customs Department probe into the smuggling of gold via air-cargo shipments to the UAE Consulate here could lead investigators to major grey-market operators who regularly supply the contraband at discounted rates and in trade quantities to lawbreakers in the jewellery trade.
Officials pointed out that the sale of gold ornaments had abounded over the years. However, there appeared to be no corresponding increase in the purchase of legal bullion by jewellers whose annual turnover was estimated, conservatively, at ₹35,000 crore. Investigators also have little clue about where the jewellers convert gold into ornaments, though some claim that they source them from traditional artisans spread across the country.
Enforcers suspect that a portion of the gold smuggled into the country through airports in Kerala was converted into machine-crafted jewellery in unregistered backyard factories that operated secretly in residential neighbourhoods. The manufacturers sold the ornaments in bulk to jewellers at a relatively concessionary rate and without a bill or any other record of the transaction.
Flight suspension
Customs officials said the suspension of international flights due to the pandemic had dented gold smuggling operations in a significant way since March-end. It had also spurred a slight increase in the sale of legal bullion in the country.
The situation might have prompted gold smugglers in the Gulf to send the contraband through cargo shipments, including at least one as air freight addressed to a diplomatic mission here.
Accused in the gold smuggling case Swapna Suresh being produced at the National Investigation Agency Court in Kochi on Sunday.
Officials said the National Investigation Agency, which was conducting a parallel probe into the gold smuggling operation that spanned international borders, had reasons to believe that a part of the profits from the racket was diverted to finance terrorism. They said the fraud also had elements of money laundering and use of hawala channels to plough back the profits into the pockets of smugglers in the Gulf.
Low tax remittance
V.D. Satheeshan, MLA, of the Congress had pointed out that the gold businesses in Kerala owed the treasury ₹3,000 crore annually. However, their tax remittance was less than ₹300 crore. Kerala had the highest per capita spending on gold. Yet, it had purportedly not reflected in the State’s tax collection.
The Finance Department has reportedly initiated an enforcement exercise to audit the manufacture and sale of gold ornaments and check stock to detect the presence of contraband. Officials have stressed the need to audit the considerable amount of gold in the custody of non-banking loan companies, valued at an estimated ₹1 lakh crore by some accounts, which accepted gold as a collateral for lending.