Gold Duty Dision Fight becomes a game of a mole

Copyright © HT Digital Streams Limit all rights reserved. Once the liquid gold views have landed in India, gold is extracted in small refineries. Summary after the last budget has tax evasion via platinum alloy, the shipment of golden compounds that can be refined to extract the yellow metal, for decades accelerated, smart smart smugglers brought in gold, hidden in body and luggage, diminished duties and the authorities for the customs authorities. Some importers nowadays come through the front door, legal and duty -free, and exploit a loophole in the system. The import of so-called liquid gold has risen since smart importers have discovered a new method to skip the customs duty almost five years ago, the import data has shown. After the last budget joined another tax evasion route, such shippers accelerated even more. Compounds of gold with other elements – also called fluid gold – are mostly used in industrial processes. Importers send it to zero service from countries such as the UAE, Japan and Australia that have trade treaties with India, compared to 6% service on the yellow metal. Once the consignments have landed in the country, gold is withdrawn in small refineries. The import of such compounds has risen 9.25 times more than a year earlier and 2.84 times quarter-to-quarter to 69,879 kg in the January-March period, data from the Directorate General of Commercial Intelligence and Statistics (DCGIS) shows. This is equivalent to gold imports of $ 1.29 billion. Read also | RBI to issue more easily gold loan rules for lenders for small tickets soon, the actual gold delivers dropped by 51.2% consecutive and 0.9% compared to a year earlier to $ 9.5 billion in Q4FY25. While higher imports of gold connections distort the trade data, it also causes a loss of treasure chest. India imported 1.11 856 kg of liquid gold from the UAE, Japan and Australia in FY25. Since the actual gold content in such imports is at least 15%, it works to gold shatters of 16,778 kg. At an average price of £ 90 lakh per kg of gold, the government lost about £ 906 in the Customs service during the fiscal, according to Tomint’s calculations. Although allowed legally, the market is twisted, as there is a big discount because one person imports gold at 6% duty, while another imports it in compound form at 0% -service, Surderingra Mehta, the National Secretary of the India Bullion and Jewelers Association, said. People who import gold connections sell the yellow at highly discounted prices, which make price discovery impossible, he said. Inquiries by e -mail to the Directorate General of Foreign Trade (DGFT) and the Ministry of Trade and Industry remained unanswered. Spike to the border fabrics on platinum alloy performs gold connections such as aurous oxide, aurous chloride, gold trichloride, gold sulfide, double sulfites of gold and gold cyanide mainly intended for industrial and scientific purposes, says Brijesh Kothary, partner at Khaitan & Co. (for decorative finishes), photography (for image reinforcement) and medicines (for therapeutic treatments), he said. To be sure, the import of gold connections stood at 2,143 kg in FY21, when this route was largely not investigated. Since then, the shipping has risen 59 times over the years to 1,27,886 kg in FY25, showing data from the DGCIS. However, this import increased in the January-March quarter due to a policy change. The DGFT placed platinum alloys with less than 99% platinum under the ‘limited’ category of ‘free’ in March after the change was announced in the budget in February. Importers now need a License of the DGFT for such shipping. According to the Customs tariff law, an alloy with platinum of more than 2% qualifies as a ‘platinum alloy’. Importers brought an alloy with just 2% platinum and 98% gold. Read also | Silver and platinum exceed Gold’s yields of 2025 “Some importers use a loophole and import platinum alloy from certain countries, which had the majority of gold in it and paid a zero percent duty,” said an official on the condition of anonymity. Now that platinum alloys are being moved to the limited category, they have begun importing gold connections to save duty, the person said. According to Kothary, classified in terms of HS code 28433000 of the Customs tariff law, 1975, Liquid Gold attracts 10% basic customs duties. “However, imports from Japan, the UAE and Australia are allowed at a zero percentage of basic customs duty under the India-Japan-encompassing economic agreement (CEPA), India-Uae CEPA and India-Australian economic and trade agreement respectively.” Most of the golden composite imports to the country mainly come from these three countries, which make up about 87% of such consignments. Skewed import data “Usually gold connections are in lower purity, where about 15-22% are gold, but can easily be refined in pure gold,” said a bank official on condition of anonymity. “Those who have a refinery can do it themselves because it is a simple process, and those who cannot outsource.” What makes it even easier is that importers get direct delivery of the shipping and need no permit. In contrast, gold importers need a License of the DGFT, and the yellow metal is imported via the India International Bullion Exchange (IIBX) in Gift City and nominated banks. Read also | Mint explanator: What are the final norms of RBI for loans against gold and silver? It discourages gold imports via the IIBX, Mehta of the Bullion Association said. “It could drop the volumes at IIBX.” To be sure, gold imports at IIBX rose 11.7 times on an annual basis to 93,072 kg in FY25, according to the IFSCA quarterly bulletin. The situation could also be the import data of India, the bank official said earlier. ‘Golden imports may look lower, but gold is still coming in, just under another HS code that does not classify it as gold. So policymakers can falsely believe that gold imports have dropped, when the route has just changed. ‘ Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. 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