Friday, August 01, 2014

Cat-and-mouse game continues as Air India, SEZs among India’s new gold smuggling routes

New Delhi/Singapore: India is scrambling to crack down on a new gold smuggling tactic that it fears could accelerate a flood of illegal imports of the precious metal into the world's second-biggest buyer.

India -- whose appetite for gold is only rivalled by China -- last year imposed a record 10 percent import duty and made it mandatory to export a fifth of all bullion imports, seeking to curb bullion demand that has blown out the trade deficit.

With the lure of big profits from avoiding duty, smugglers have come up with innovative ways to bring in gold ranging from swallowing nuggets to hiding bars in dead cows.

In the latest smuggling case, a gold exporting firm attempted to use a tax-free special economic zone to try to bypass restrictions and sell to the local market.

The scam was uncovered after police stopped a car trying to take 25 gold bars, worth about $1 million, out of a tax-free special economic zone in Surat in June to sell to the domestic market, according to a government document seen by Reuters. The owner of the firm was arrested.
01/08/14 First Biz
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