NEW DELHI: In a bid to curb parking of black money in bullion, the government would notify a new threshold for transactions in gold and other precious metals that need to be reported to the authorities, Revenue Secretary Hasmukh Adhia said.
On Friday, the government had reversed its August order of bringing gems and jewellery dealers under the purview of the Prevention of Money Laundering Act (PMLA).
According to Adhia, the August 23 order had to be rescinded because it created “confusion and a lot of negative sentiment” because no threshold for transactions to be reported was set.
“For the first time in India, we had notified that jewellers will be reporting entity (under PMLA) but what report they will submit to us was not clear,” he stated.
This led to jewellers implementing the August 23 order on the line of banks, where cash transactions of Rs 50,000 and above are to be reported. “And that affected sentiments. So, now we have to sit down and decide about it,” he said.
The rollback of the August 23 order meant the requirement of quoting PAN for jewellery purchases exceeding Rs 50,000 is no longer applicable.
“The H50,000 threshold is too onerous in case of jewellery. Cash deposit is different in bank where everything is electronic and easy to report. But, here they started implementing...Our notification (of August 23) only said that any jeweller with turnover of more than Rs 2 crore will be the reporting entity. Rs 50,000 requirement is in general rules,” Adhia said.
According to Adhia, there was some confusion over the need to report high-value transactions, which created a lot of negative sentiment.
“We will study what to do and we will again re-notify them as reporting entity but with what limit that we will decide. We will check with industry and decide soon,” the revenue secretary said.
Explaining the PMLA reporting rules, Adhia said all governments have financial intelligence units and there is anti money laundering act in every country.