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Customs duty on gold stumps Indian expats

9 July 2012

As hundreds of thousands of non-resident Indians (NRIS) go home from the Gulf countries these days for the summer vacation, several of them are getting stumped at the airports. They are being asked to declare the gold in their possession at the Indian airports and to pay duty on the “excess quantity”.

Many of them are still not aware that the Indian government has reintroduced a rule passed in late 1960s that states that NRIs could carry only gold or jewellery worth Rs10,000 for men and Rs20,000 for women. Apparently, the customs department has displayed notices announcing this at all international airports. However, several NRIs carry gold in excess of the allowed amount.

Some of the Indian associations have already expressed concerns over the issue and demanded immediate abolition of the rule. They have demanded that the Indian government should levy the customs duty based on the weight of gold instead of the value of gold as rate of gold will keep changing. A UAE-based Indian group has also sought the intervention of Indian Prime Minister Manmohan Singh in revoking the rule and setting new regulations.

Chairman of the  Sharjah-based Pravasi Bandhu Welfare Trust K. V. Shamsudheen, who submitted a representation to the Prime Minister’s office, said as per the current market value of gold, a man could only carry three grams and a woman six grams of gold.

“Under the present circumstances, a passenger may have to pay tax for even a wedding ring or a mangalsutra since their weight would exceed the permissible limit,” he pointed out.

“The law being implemented now is more than 40 years old… That time, the gold price was Rs40 for a gram. So, those days a male passenger could take 250 grams and a lady passenger 500 grams of gold without paying tax.”

He said the Indian finance ministry officials, during their visit to the GCC countries, had said that India had imported a record quantity of gold for domestic consumption which has led to the reintroduction of this duty.

“When an NRI takes gold to the country, the government is getting sufficient gold without the loss of foreign currency paid for its import. Instead of encouraging NRIs to take gold to the country, the reintroduction of half-a-century-old law will be to harass the NRIs,” Shamsudheen said in the representation sent on Thursday.

“We request the prime minister to intervene in this issue and permit NRIs to take at least 100gm of gold by a male passenger and 200gm by a female passenger to India without paying tax, as these quantities are less than what was permitted when the law was introduced in the 1960s ,” he added.

“It is a shame that our government is sticking to a 1967 rule related to gold when the gold’s rate has skyrocketed in recent years,” said Shilin Kumar, a Dubai resident whose family had to keep 271 grams of gold at the Kochi International Airport when they landed there on June 30.

He said the expatriates from Kerala, particularly those travelling to Kochi, were facing more difficulties. “It is habitual for passengers to Kerala, especially women, to wear a lot of gold jewellery. Customs officials in the Kochi airport are taking advantage of this age-old rule to harass people by interrogating them in a very rude manner,” said Kumar who runs a cargo company in Dubai.


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