Gold and silver in any form, other than monetary gold and silver in any form, has been moved from free to restricted list, a government notification dated December 18 said. The imports under FTA were at a nominal duty against the 12.5% duty on gold and silver.
Unscrupulous importers would import gold plates, kettles , pots etc , melt and make them into bars. They would sell the bars in the domestic market at the applicable duty, making a windfall.
Under the revamped rules, the import of the metals in powder, sheet, plate, tubes and pipes and other unwrought forms will be allowed only through nominated agencies (banks) as notified by RBI and those approved by DGFT. However, import under advance authorisation and supply of gold directly by foreign buyers to exporters under the relevant heading of the Foreign Trade Policy 2015-2020 against export orders have been exempted.
Gold and silver dore have also been moved from free to restricted list but refiners can import the same against license with actual user (AU) condition. Banks will not be able to import dore as they aren’t actual users.
James Jose, director, Chemmanur Gold Refinery, and Surendra Mehta, national secretary, India Bullion and Jewellers Association (IBJA) welcomed the move.
Star and premier trading houses can import gold only for export purposes, whereas those wanting to buy gold for sale in the local market can purchase the same on consignment basis or through metal loan from over two dozen banks or agencies like MMTC, PEC, etc.
Gold at present attracts 12.5% import duty and 3% GST. India has signed FTAs with Asean countries, Japan and South Korea.