The latest gold haul at Madurai airport points to a spurt in smuggling of the precious metal.
The ease of buying gold at airports and the absence of restrictions or existence of free trade at Dubai and Singapore have made them popular cities for sourcing gold and smuggling them into the country.
“Dubai and Singapore are the major supply centres for gold market in general and most of the travellers in this part of the country [south India] are from these two sectors. Hence couriers of smuggling gangs easily get away ,” a senior official said.
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Though gold is not priced cheap in any country, it is the exchange rate difference and the import duty that makes the difference. If one kg of 24 carat gold is smuggled into the country from Dubai, the smuggler saves up to Rs. 5 lakh going by the current rates.
“The nature of unorganised gold jewellery industry or trade, lack of transparency in commercial transactions, stiff resistance to any government intervention either declaration of PAN details of buyers or any intervention for proper accounting makes breeding ground for stashing smuggled gold in the market,” he said.
After the Directorate of Revenue Intelligence (DRI) noticed that the sea coast of Tamil Nadu was used for smuggling activities from June 2013, a number of cases have been registered against the smugglers and their agents. “Scanning of courier consignments by customs and other government agencies acts as a check against gold smuggling,” he said.
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Legal action
A total of 54 persons involved in smuggling of gold have been arrested during 2014-15 and customs proceedings initiated against them. In cases where the smugglers are caught red handed, when they themselves are involved directly in smuggling activity or considering the gravity of each offence and facts of the case, preventive detention under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA), 1974 is also taken.
Going by the rule book, an Indian passenger, who has been residing abroad for over one year is allowed to bring jewellery, free of duty in his bonafide baggage up to an aggregate value of Rs. 50,000 (male passenger) and Rs. one lakh (female passenger).
Any passenger of Indian origin or a passenger holding a valid passport, who is coming to India after a period of not less than six months of stay abroad is eligible to import gold as baggage.
Section 77 of the Customs Act, 1962 and Baggage Rules, 1998 require that the owner of any baggage shall, for the purpose of clearing it, make a declaration of its contents to the proper officer of Customs upon arrival at any international airport in India.
Penal provisions
The penal provisions may lead to – absolute confiscation of goods, imposition of heavy fine in respect of the concerned goods if these are released – imposition of penalty on individual or concerned entities – arrest and prosecution, including invocation of preventive detention in serious cases.
Dubai and Singapore are major supply centres and most of the travellers in south India are from these two sectors