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Gold importers come under tax scanner in India Issac John / 20 January 2014 Analysts said the latest move, which comes in the wake of a rise in the import tariff value of gold to $407 per 10 grams last week by India, is expected to incentivise the illegal transportation of gold into India. Financial details of Indians bringing in gold from abroad after duty payment will henceforth be shared by customs authorities with Income Tax department. The dramatic joint move by customs and tax authorities is aimed at curbing suspicious ferrying of gold into India by carriers — mostly low income expatriate workers in the Gulf — deployed by organised gang of ‘indirect’ importers. Analysts said the latest move, which comes in the wake of a rise in the import tariff value of gold to $407 per 10 grams last week by India, is expected to incentivise the illegal transportation of gold into India, the largest yellow metal consumer in the world with imports surging to 830 tonnes in 2012-13. Under the current rule, an Indian who has been living abroad for over six months can legally bring in a kilo of gold after payment of duty. The duty, which is charged at the rate of 10 per cent of the value, is payable in currency of the nation where the gold was bought. Besides, a man can also bring in gold jewellery worth Rs50,000 and women Rs100,000, without payment of any duty, provided they live abroad for more than a year. Indirect gold importers in India have been paying Rs50,000 to Rs75,000 and free air tickets to each carrier for importing one kilo of gold. A smuggler is able to make a profit of Rs75,000 on every kilo of gold even after paying the duty and the commission to the carriers. The smuggled gold is being sold to jewellery makers in Kerala, Tamil Nadu and Andhra Pradesh. According to reports, gold that was brought in after paying the required duty totalled 80kg in a week last month at Kerala’s Calicut airport alone. However, the new move to put the person bringing the gold under the income tax net may deter many from acting as carriers. Officials in the Directorate of Revenue Intelligence (DRI) said at least 3,000kg of gold has been legally brought into the country after payment of customs duty during 2013-14. “There is a possibility of an organised gang of hawala operatives who could be exploiting these people after paying money. The PAN card details of these flyers are being shared with Income Tax department to ascertain source of their income and avoid possibility of any wrongdoing,” a senior DRI official said. Informed source say that the carriers may have to pay wealth tax if they declare that the gold brought by them is for themselves. If they say the gold is sold they will be forced to pay the sales tax. In that case, they will also have to produce the documents for the sale. issacjohn@khaleejtimes.com For more news from Khaleej Times, follow us on Facebook at facebook.com/khaleejtimes , and on Twitter at @khaleejtimes Continue reading →
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