HYDERABAD: A slightest of deviations in the foreign trade policy for import of gold has got the authorities, including the Reserve Bank of India (RBI) thinking. In a recent instance detected in Hyderabad, large quantities of import of goods declared as “gold granules”, which are neither imported on a consignment basis or on credit, but purchased from abroad by making an advance payment through bank letters of credit, has posed serious questions regarding gold imports.
Customs officials suspect that over 1,500 kg of gold are waiting to be imported into the country in this manner, which, they believe, could disturb the country’s economy on the whole.
In a boost for the Hyderabad Customs Commissionerate, which argued against import of gold granules (non-monetary) by a city-based businessman and seized two air shipments totalling 155 kg gold worth Rs 45.18 crore in May 2019, the high court refused clearance of the gold seized by Customs authorities and also gave a stay on the order of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which had earlier allowed such imports. Meanwhile, it has paid heed to the businessman’s plea requesting re-export of the said gold that was imported.
The gold was seized by officials, stating that only nominated banks, notified agencies or status holders were entitled to import gold, as per RBI regulations, governed by the foreign trade policy.
The argument was that the petitioner is none of the above, and thus, not eligible to import gold. Customs authorities have further argued that the payment methods for import of gold can be on loan basis, on supplier’s credit or buyer’s credit basis, on a consignment basis or on an unfixed price basis.
Meanwhile, Rajesh Kolawar of RK Digitals, which imported the said shipments, said gold is freely importable and his imports are completely legal. “I have paid 10.3 per cent duty and 3 per cent IGST and payment conditions of 90-days credit were satisfied. I have not been given any reason in writing as to why my gold was seized.”
He also claimed there was no stay on the CESTAT order and that it was only a limited suspension, through a temporary verbal order. The gold was meant for home consumption, ie; for sale in wholesale and retail markets in India.