Gold smuggling rampant in India
India's increase of import duty on the precious metal from 6% to 8% effective June 5, has resulted in a sudden jump in gold smuggling from Dubai, since gold costs $1,659 more per kilo in Mumbai.
Posted: Wednesday , 03 Jul 2013
MUMBAI (Mineweb) -
Gold smuggling has gone up several notches in India. The Air Intelligence Unit of the Mumbai Customs thwarted an attempt to smuggle gold into the country from Dubai. This is the sixth attempt thwarted in the past seven days.
On July 3, three passengers were arrested from the Mumbai International airport for allegedly trying to smuggle in 2.86 kilo of gold worth $112,883 (Rs 6 million) from Dubai in three separate cases.
According to customs officials, after banks stopped selling gold coins and following the hike in import duty, there has been a spurt in demand for the metal prompting people to smuggle.
Officials pointed out that smugglers and buyers of smuggled gold tend to save on import duty as well as other taxes like value added tax and income tax.
Given the severe curbs on gold buying and selling, other sources are trying to pitch in and take advantage of the situation, by selling gold through illegal means, they added.
Kumar Jain, vice president of the Mumbai Jewellers Association said that smuggling would gain momentum afresh, once the existing stock, which was brought into the country before the hike in duty, is depleted.
A passenger, Modi Umar Isha from Jamnagar Gujarat, is a case in point. He was intercepted last night on June 2, with 932 grams of gold valued at $36,716 (Rs 2 million) concealed in a television set that he was carrying. Modi arrived in Mumbai in a Jet Airways flight from Dubai.
Another passenger called Saurani Imtiyaz Jikar, who was also carrying the same quantity of gold in his television set, arrived from Dubai in another flight, an Emirates flight.
The authorities also confiscated one kilo of gold from Shamseen Thayyullathil from Calicut of Kerala, who was concealing the gold in his undergarments. He also arrived from Dubai in an Emirates Flight.
The craze to bring in gold into India has reached unprecedented levels. Authorities said the smuggling from Dubai is rampant, since gold costs $1,659 (Rs 100,000) more per kilo in Mumbai. Bringing it in from Dubai works out cheaper for the consuming class in India.
The seizure of 94 gold biscuits worth $436,653 (Rs 26 million) from five Sri Lankan nationals at Chennai airport late last month has also exposed an active racket of smugglers and money launderers with Dubai links.
At the Chennai airport, it is termed as one of the biggest hauls the Directorate of Revenue Intelligence has made in the last five years.
Investigators said commission for the smugglers was fixed at $16.82 (Rs 1,014) precisely per 10 gram of gold. The carriers tend to get double if they manage to bring in cash for the agents in Dubai, an official said.
Meethal Nizar, who had arrived from Dubai, was arrested for carrying 2 kilo of gold. A resident of Kozhikode, Kerala, Nizar was caught after he crossed the green channel at the Mumbai international airport without declaring the gold he was carrying.
When a personal search was conducted, officials seized two gold bars concealed in his socks.
Another man was arrested on June 30, with a crudely made gold chain which he was attempting to smuggle into India from Dubai. The suspect was nabbed while he was trying to pass through the scanner at the BIA after landing from an Air India flight.
He had concealed the chain by wrapping it with a black adhesive tape wrapped around his waist under his shirt. Officials added that a similar attempt to smuggle in 10 gold bars weighing 1,166.40 gram from a passenger who had stashed them in a nylon belt wrapped around his neck, was also confiscated. He too had come in from Dubai.
For many Indians working in Dubai, or even touring the nation, this is one transit that does not end up in riches.