7/20/12

Saudi Gazette - NRIs angry at reintroduction of decades-old gold customs duty

Friday, 20 July 2012 01 Ramadan 1433 H

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NRIs angry at reintroduction of decades-old gold customs duty

Shams Ahsan Saudi Gazette JEDDAH Indians, beware! If you are traveling home this summer and carrying gold jewelry with you then be prepared to pay heavy customs duty. The Indian government has recently reintroduced a 45-year-old customs law, according to which Non-Resident Indian men can carry gold jewelry worth only Rs10,000 (around SR682) and women gold worth only Rs20,000 (around SR1,400) duty free. As per this rule and taking into consideration todays high gold rates, women can carry only 7.1 gm of gold jewelry and men can take only 3.5 gm of the precious metal into India without being subject to customs charges. Now an NRI carrying gold ornaments beyond the permitted limit will have to pay 10 percent of the value plus three percent of the duty as an education tax. Earlier, one had to pay only Rs300 per 10 grams of gold jewelry. However, most homebound Indians who usually carry sizable amounts of gold jewelry were caught unawares at airports in India. My wife was carrying some gold ornaments as a wedding gift for a close relatives daughter. We were shocked when we were stopped at the Green Channel at the Kochi airport and asked to declare the jewelry in our possession, Viju Nair, who returned to the Kingdom recently after dropping his family in India, told Saudi Gazette. We did not want to pay the heavy customs duty, so we decided to deposit the gold jewelry at the airport, which my wife will bring back when she returns to the Kingdom next month, he said. According to this law, an Indian woman who generally wears gold ornaments weighing not less than 40-50 grams can now carry only a gold ring duty free, said Abdul Jamil, who was shocked to learn about this rule. The Federation of Kerala Associations in Saudi Arabia (FOKASA) has called the move unrealistic and illogical. In a statement sent to Saudi Gazette FOKASA president R. Muraleedharan said the government of India has intentionally introduced this tax mainly meant for NRIs, especially Gulf NRIs who return home frequently. This measure is illogical in the sense that the current duty-free import of gold and jewelry was fixed several decades ago, at a time when the price of gold was negligible, he said. India is the worlds top hoarder of gold as the yellow metal is the most popular investment option and gold jewelry is the most favored and sought-after gift item at weddings. The country imported some 969 tons of gold in 2011 over half of this in the form of jewelry. One of the primary drivers of the current account deficit has been the growth of almost 50 percent in imports of gold and other precious metals in the first three quarters of this year, former finance minister Pranab Mukherjee was quoted as saying in May.

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