Gold smugglers benefit from 12.5% import tax amid Coronavirus crisis

Illegal shipments of gold have been reduced from 120 tons being smuggled last year to 25 tons this year, according to World Gold Council.

Illegal shipments of gold have been reduced from 120 tons being smuggled last year to 25 tons this year, according to World Gold Council. Due to the restrictions and lockdowns in several nations, the inflow of gold has slowed down in a big way.

In March, when the whole world was in a lockdown, there was an obvious slow down in the economy which eventually affected the demand of gold. There was no way India would relax it’s restrictions any time soon which means that illegal gold was accessible only from Nepal, Pakistan and Sri Lanka.

20.6 kilograms of smuggled gold was caught in the Indian airports this year which is less than that of previous years. Smugglers did benefit from high prices and import taxes imposed on the shipment of metal and additional local taxes. This made illegal purchases reasonable. Whereas jewellers faced a cut of at least 50% in the import tax to reduce the inflows and legalize the imports.

According to N. Anantha Padmanaban, the chairman of the All India Gem and Jewellery Domestic Council, removal of the import duty on gold by Sri Lanka this month, might increase smuggling into India. Once the restrictions relax and international flights resume, the smuggling of gold will begin again.

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