Kolkata which requires around 250 kilograms everyday of yellow metal to meet the everyday demand of gold lovers, has started importing around 40 per cent of the gold without paying customs charges, mostly to circumvent the increase in gold import duty which is currently at six per cent.%% These acts by the traders are causing a loss of around Rs 35lakh to Rs 40 lakh everyday to the state’s exchequer in the form of value added tax (VAT). %% While when duty was increased to four per cent in last Union Budget 2012, illegal import accounted for around 25 per cent, sources said adding that the West Bengal government had then lost around Rs 20 lakh everyday in the form of VAT. %% It is learnt that gold biscuits weighing 116.64 gms or popularly known as ‘10 tola bars’ which was not in circulation from almost eight years ago, has started to enter the Kolkata market from neighbouring countries like Nepal, Sri Lanka and Bangladesh. %% Tola bars are unnumbered bars, as opposed to the standard numbered bars. Once melted, these are difficult to trace. But standard bars leave a trail of utilisation and smuggled standard bars can be traced, city-based gold analysts said. “The high import duty on standard bars has resurrected gold smuggling, bringing back the tola bars into circulation,” one analyst said. %% The price difference with international market coupled with higher duties and taxation have encouraged gold smuggling. Organised cartels have slowly become active again in gold smuggling. “When the base price of gold is increased, the psychology of traders shifts towards attaining the yellow through illegal ways,” said Sugandha Sachdeva, in-charge of metals, energy and currency research, Religare Broking. %% “West Bengal is losing around Rs 35lakh to Rs 40 lakh everyday in the form of one per cent VAT on the import,” said Harshad Ajmera, proprietor, JJ Gold House. %%

Sources said some big jewellers are engaged in illegal trade and import gold from Dubai, Singapore and Hong Kong and route them to Kolkata through Bangladesh thus saving around 7.12 per cent of the levy, including six per cent import duty and the remaining as VAT. %% Gold is predominantly smuggled into India from neighboring countries like UAE and Thailand where it is traded at cheaper prices as compared to India. Some other countries from where it is smuggled into India included Nepal, Malaysia and Qatar,” said Sachdeva. %% Sources further said the increased levy is likely to encourage illegal gold imports in the coming months too. Southern India, which is the major market for the jewellers, buys gold from Sri Lanka. %% “Gold smuggling has increased drastically because of the import duty. The other reason for the increase in gold smuggling is that people want to utilise black money,” sources said. %% Bablu De, partner of Guinea Emporium, and also a working member of the Swarna Shilpi Bachao Committee, said with the import duty increased to six per cent, a section of the traders would import through unofficial channels and this trend has increased of late too in Kolkata-the jewellery hub of eastern region. “The state government is also losing the VAT part. Gold import through illegal channel must be stopped,” he said. %% Officially, around 170 kgs of gold is officially imported from Dubai, Singapore, South Africa and Australia and other markets, according to sources. %% De too cited instances of people being caught while importing illegal gold from Bangaldesh. On the other hand, Ajmera confirmed that some days ago a man was caught in Burrabazar while channelising illegal gold. %% The directorate of revenue intelligence (DRI) recently caught 35.85 kg of tola bars while being smuggled into the country from Bangladesh. %% Market sources suggested that the increased levy is likely to encourage illegal gold imports in Kolkata market further. %% Pankaj Parekh, Vice-Chairman, Gem & Jewellery Export Promotion Council (GJEPC), said, “When import duty was two per cent, illegal import was not rampant but when it was increased to four per cent, it was a viable business and now with six per cent import duty, it has become a lucrative business. Gold smuggling leads to illegal activities and GJEPC is against all these.” %% “From April to June 2012, around 200 cases of illegal gold import worth around Rs 942 crore were reported ,” added Parekh. %% Bachhraj Bamalwa, ex-chairman of the All India Gems & Jewellery Trade Federation (GJF), said, “Smuggling cannot be stopped with the current six per cent levy.” %% Chandra Surana, proprietor of Bhuramal Rajmal Surana Jouhree, said increasing the import duty will not discourage consumption of gold and even if the duty reaches an unbelievable level, people will still invest in jewellery. “The imported gold should be used for value addition and if the gold is converted into jewellery, the labour class gets employment and the workers are benefitted.” %%

“Government should come out with a policy framework and discourage gold hoardings,” said Surana. %% Prayas Dugar, Managing Director, Indian Gem & Jewellery Creation said West Bengal is the manufacturing hub of handmade jewellery and it accounts even more than jewellery produced in South India. “Jewellers in Kolkata are importing through unauthorised ways,” said Dugar. %% The government wants to curb gold imports to check the ballooning current account deficit (CAD) that touched a record high of 6.7 per cent in third quarter of 2012-13. India’s gold imports stood at $42 billion in April 2012 t0 January 2013, contributing massively to the CAD, gold analysts said. “The government is clearly anti-gold,” an analyst added. %% Kamal Parekh, Partner, Steward & Co, a stock broking firm, said: “Since investment in gold is virtually non-productive, it is a welcome step to increase the duty so that CAD can be reduced. However, smuggled gold will always be there.” %% Talking about the craze of gold among people, Sachdeva said Indians are the largest consumer of gold and the demand for this particular commodity is almost price inelastic. Gold has arrived as an investment product in India along with the traditional jewellery demand which is also attributable to the illegal import of gold in the country, he said. %% Parekh emphasised that people have lost money in stock markets and stock value has fallen drastically since the crisis of 2008-09. The crash of financial institutions has shaken the investors and the only sellable commodity was found to be gold. As a result, people started withdrawing investments from equities, real estates and started investing in gold as it gave an annual return of 15 to 16 per cent. %% In 2011, India imported around 969 tonne of gold. While the official gold import went down in 2012. %% “In January 2012, the duty structure for gold was almost doubled to two per cent and then in less than two months, the levy was doubled to four per cent in Budget 2012-13. Now in January 2013, it has been raised to six per cent,” said Namit Dave a gold analyst. %% As smuggling rears its ugly head again, customs officials and the DRI are keeping a close watch on gold entering Kolkata, sources concluded. %%

Kolkata which requires around 250 kilograms everyday of yellow metal to meet the everyday demand of gold lovers, has started importing around 40 per cent of the gold without paying customs charges, mostly to circumvent the increase in gold import duty which is currently at six per cent.%% These acts by the traders are causing a loss of around Rs 35lakh to Rs 40 lakh everyday to the state’s exchequer in the form of value added tax (VAT). %% While when duty was increased to four per cent in last Union Budget 2012, illegal import accounted for around 25 per cent, sources said adding that the West Bengal government had then lost around Rs 20 lakh everyday in the form of VAT. %% It is learnt that gold biscuits weighing 116.64 gms or popularly known as ‘10 tola bars’ which was not in circulation from almost eight years ago, has started to enter the Kolkata market from neighbouring countries like Nepal, Sri Lanka and Bangladesh. %% Tola bars are unnumbered bars, as opposed to the standard numbered bars. Once melted, these are difficult to trace. But standard bars leave a trail of utilisation and smuggled standard bars can be traced, city-based gold analysts said. “The high import duty on standard bars has resurrected gold smuggling, bringing back the tola bars into circulation,” one analyst said. %% The price difference with international market coupled with higher duties and taxation have encouraged gold smuggling. Organised cartels have slowly become active again in gold smuggling. “When the base price of gold is increased, the psychology of traders shifts towards attaining the yellow through illegal ways,” said Sugandha Sachdeva, in-charge of metals, energy and currency research, Religare Broking. %% “West Bengal is losing around Rs 35lakh to Rs 40 lakh everyday in the form of one per cent VAT on the import,” said Harshad Ajmera, proprietor, JJ Gold House. %%

Sources said some big jewellers are engaged in illegal trade and import gold from Dubai, Singapore and Hong Kong and route them to Kolkata through Bangladesh thus saving around 7.12 per cent of the levy, including six per cent import duty and the remaining as VAT. %% Gold is predominantly smuggled into India from neighboring countries like UAE and Thailand where it is traded at cheaper prices as compared to India. Some other countries from where it is smuggled into India included Nepal, Malaysia and Qatar,” said Sachdeva. %% Sources further said the increased levy is likely to encourage illegal gold imports in the coming months too. Southern India, which is the major market for the jewellers, buys gold from Sri Lanka. %% “Gold smuggling has increased drastically because of the import duty. The other reason for the increase in gold smuggling is that people want to utilise black money,” sources said. %% Bablu De, partner of Guinea Emporium, and also a working member of the Swarna Shilpi Bachao Committee, said with the import duty increased to six per cent, a section of the traders would import through unofficial channels and this trend has increased of late too in Kolkata-the jewellery hub of eastern region. “The state government is also losing the VAT part. Gold import through illegal channel must be stopped,” he said. %% Officially, around 170 kgs of gold is officially imported from Dubai, Singapore, South Africa and Australia and other markets, according to sources. %% De too cited instances of people being caught while importing illegal gold from Bangaldesh. On the other hand, Ajmera confirmed that some days ago a man was caught in Burrabazar while channelising illegal gold. %% The directorate of revenue intelligence (DRI) recently caught 35.85 kg of tola bars while being smuggled into the country from Bangladesh. %% Market sources suggested that the increased levy is likely to encourage illegal gold imports in Kolkata market further. %% Pankaj Parekh, Vice-Chairman, Gem & Jewellery Export Promotion Council (GJEPC), said, “When import duty was two per cent, illegal import was not rampant but when it was increased to four per cent, it was a viable business and now with six per cent import duty, it has become a lucrative business. Gold smuggling leads to illegal activities and GJEPC is against all these.” %% “From April to June 2012, around 200 cases of illegal gold import worth around Rs 942 crore were reported ,” added Parekh. %% Bachhraj Bamalwa, ex-chairman of the All India Gems & Jewellery Trade Federation (GJF), said, “Smuggling cannot be stopped with the current six per cent levy.” %% Chandra Surana, proprietor of Bhuramal Rajmal Surana Jouhree, said increasing the import duty will not discourage consumption of gold and even if the duty reaches an unbelievable level, people will still invest in jewellery. “The imported gold should be used for value addition and if the gold is converted into jewellery, the labour class gets employment and the workers are benefitted.” %%

“Government should come out with a policy framework and discourage gold hoardings,” said Surana. %% Prayas Dugar, Managing Director, Indian Gem & Jewellery Creation said West Bengal is the manufacturing hub of handmade jewellery and it accounts even more than jewellery produced in South India. “Jewellers in Kolkata are importing through unauthorised ways,” said Dugar. %% The government wants to curb gold imports to check the ballooning current account deficit (CAD) that touched a record high of 6.7 per cent in third quarter of 2012-13. India’s gold imports stood at $42 billion in April 2012 t0 January 2013, contributing massively to the CAD, gold analysts said. “The government is clearly anti-gold,” an analyst added. %% Kamal Parekh, Partner, Steward & Co, a stock broking firm, said: “Since investment in gold is virtually non-productive, it is a welcome step to increase the duty so that CAD can be reduced. However, smuggled gold will always be there.” %% Talking about the craze of gold among people, Sachdeva said Indians are the largest consumer of gold and the demand for this particular commodity is almost price inelastic. Gold has arrived as an investment product in India along with the traditional jewellery demand which is also attributable to the illegal import of gold in the country, he said. %% Parekh emphasised that people have lost money in stock markets and stock value has fallen drastically since the crisis of 2008-09. The crash of financial institutions has shaken the investors and the only sellable commodity was found to be gold. As a result, people started withdrawing investments from equities, real estates and started investing in gold as it gave an annual return of 15 to 16 per cent. %% In 2011, India imported around 969 tonne of gold. While the official gold import went down in 2012. %% “In January 2012, the duty structure for gold was almost doubled to two per cent and then in less than two months, the levy was doubled to four per cent in Budget 2012-13. Now in January 2013, it has been raised to six per cent,” said Namit Dave a gold analyst. %% As smuggling rears its ugly head again, customs officials and the DRI are keeping a close watch on gold entering Kolkata, sources concluded. %%

Kolkata which requires around 250 kilograms everyday of yellow metal to meet the everyday demand of gold lovers, has started importing around 40 per cent of the gold without paying customs charges, mostly to circumvent the increase in gold import duty which is currently at six per cent.%% These acts by the traders are causing a loss of around Rs 35lakh to Rs 40 lakh everyday to the state’s exchequer in the form of value added tax (VAT). %% While when duty was increased to four per cent in last Union Budget 2012, illegal import accounted for around 25 per cent, sources said adding that the West Bengal government had then lost around Rs 20 lakh everyday in the form of VAT. %% It is learnt that gold biscuits weighing 116.64 gms or popularly known as ‘10 tola bars’ which was not in circulation from almost eight years ago, has started to enter the Kolkata market from neighbouring countries like Nepal, Sri Lanka and Bangladesh. %% Tola bars are unnumbered bars, as opposed to the standard numbered bars. Once melted, these are difficult to trace. But standard bars leave a trail of utilisation and smuggled standard bars can be traced, city-based gold analysts said. “The high import duty on standard bars has resurrected gold smuggling, bringing back the tola bars into circulation,” one analyst said. %% The price difference with international market coupled with higher duties and taxation have encouraged gold smuggling. Organised cartels have slowly become active again in gold smuggling. “When the base price of gold is increased, the psychology of traders shifts towards attaining the yellow through illegal ways,” said Sugandha Sachdeva, in-charge of metals, energy and currency research, Religare Broking. %% “West Bengal is losing around Rs 35lakh to Rs 40 lakh everyday in the form of one per cent VAT on the import,” said Harshad Ajmera, proprietor, JJ Gold House. %%

Sources said some big jewellers are engaged in illegal trade and import gold from Dubai, Singapore and Hong Kong and route them to Kolkata through Bangladesh thus saving around 7.12 per cent of the levy, including six per cent import duty and the remaining as VAT. %% Gold is predominantly smuggled into India from neighboring countries like UAE and Thailand where it is traded at cheaper prices as compared to India. Some other countries from where it is smuggled into India included Nepal, Malaysia and Qatar,” said Sachdeva. %% Sources further said the increased levy is likely to encourage illegal gold imports in the coming months too. Southern India, which is the major market for the jewellers, buys gold from Sri Lanka. %% “Gold smuggling has increased drastically because of the import duty. The other reason for the increase in gold smuggling is that people want to utilise black money,” sources said. %% Bablu De, partner of Guinea Emporium, and also a working member of the Swarna Shilpi Bachao Committee, said with the import duty increased to six per cent, a section of the traders would import through unofficial channels and this trend has increased of late too in Kolkata-the jewellery hub of eastern region. “The state government is also losing the VAT part. Gold import through illegal channel must be stopped,” he said. %% Officially, around 170 kgs of gold is officially imported from Dubai, Singapore, South Africa and Australia and other markets, according to sources. %% De too cited instances of people being caught while importing illegal gold from Bangaldesh. On the other hand, Ajmera confirmed that some days ago a man was caught in Burrabazar while channelising illegal gold. %% The directorate of revenue intelligence (DRI) recently caught 35.85 kg of tola bars while being smuggled into the country from Bangladesh. %% Market sources suggested that the increased levy is likely to encourage illegal gold imports in Kolkata market further. %% Pankaj Parekh, Vice-Chairman, Gem & Jewellery Export Promotion Council (GJEPC), said, “When import duty was two per cent, illegal import was not rampant but when it was increased to four per cent, it was a viable business and now with six per cent import duty, it has become a lucrative business. Gold smuggling leads to illegal activities and GJEPC is against all these.” %% “From April to June 2012, around 200 cases of illegal gold import worth around Rs 942 crore were reported ,” added Parekh. %% Bachhraj Bamalwa, ex-chairman of the All India Gems & Jewellery Trade Federation (GJF), said, “Smuggling cannot be stopped with the current six per cent levy.” %% Chandra Surana, proprietor of Bhuramal Rajmal Surana Jouhree, said increasing the import duty will not discourage consumption of gold and even if the duty reaches an unbelievable level, people will still invest in jewellery. “The imported gold should be used for value addition and if the gold is converted into jewellery, the labour class gets employment and the workers are benefitted.” %%

“Government should come out with a policy framework and discourage gold hoardings,” said Surana. %% Prayas Dugar, Managing Director, Indian Gem & Jewellery Creation said West Bengal is the manufacturing hub of handmade jewellery and it accounts even more than jewellery produced in South India. “Jewellers in Kolkata are importing through unauthorised ways,” said Dugar. %% The government wants to curb gold imports to check the ballooning current account deficit (CAD) that touched a record high of 6.7 per cent in third quarter of 2012-13. India’s gold imports stood at $42 billion in April 2012 t0 January 2013, contributing massively to the CAD, gold analysts said. “The government is clearly anti-gold,” an analyst added. %% Kamal Parekh, Partner, Steward & Co, a stock broking firm, said: “Since investment in gold is virtually non-productive, it is a welcome step to increase the duty so that CAD can be reduced. However, smuggled gold will always be there.” %% Talking about the craze of gold among people, Sachdeva said Indians are the largest consumer of gold and the demand for this particular commodity is almost price inelastic. Gold has arrived as an investment product in India along with the traditional jewellery demand which is also attributable to the illegal import of gold in the country, he said. %% Parekh emphasised that people have lost money in stock markets and stock value has fallen drastically since the crisis of 2008-09. The crash of financial institutions has shaken the investors and the only sellable commodity was found to be gold. As a result, people started withdrawing investments from equities, real estates and started investing in gold as it gave an annual return of 15 to 16 per cent. %% In 2011, India imported around 969 tonne of gold. While the official gold import went down in 2012. %% “In January 2012, the duty structure for gold was almost doubled to two per cent and then in less than two months, the levy was doubled to four per cent in Budget 2012-13. Now in January 2013, it has been raised to six per cent,” said Namit Dave a gold analyst. %% As smuggling rears its ugly head again, customs officials and the DRI are keeping a close watch on gold entering Kolkata, sources concluded. %%