Fed tests gold upleg
Gold’s outlook and fundamentals remain really bullish.
Delhi International Airport.
Customs officials at India’s main airports are failing to curb the increasing number of gold smuggling cases, as about 50 tonnes of the precious metal reportedly made it into the country only in the past 10 days.
According to a report in the Hindustan Times earlier this week, the peak is tied to the seasonal increased demand related to India’s Festival season when gold buying and gifting is almost a must.
At Delhi International Airport there have been 392 cases of smuggling since September last year, with almost 380 kg. of gold seized so far. In comparison, the number of cases in 2012-13 was nine.
“In the past two years, 166 people were arrested but almost all of them were carriers and are now out on bail. Arresting a carrier, who is used by the smuggler is easy but the racket cannot be stopped till the root is targeted,” a customs official, who was earlier posted at the airport, was quoted as saying.
The paper’s sources said that after arresting a person, the case goes to court where senior officials tend not to follow it.
Yet, most of the smuggling seems to be happening through land boundaries with Pakistan, Bhutan, Nepal and Bangladesh. There is as well some possibly coming in by sea from the Gulf States.
Import restrictions
The Reserve Bank of India (RBI) has been imposing lately several restrictions on gold imports in an attempt to curb demand for the precious metal and reduce the country’s current account deficit. Currently the import duty on gold and silver remains unchanged at 10%.
In April the World Gold Council said India’s demand for gold was likely to remain high this year, despite government attempts to slow the flow of the precious metal to the South Asian nation.
India, which lost its position as the world’s top consumer of gold to China last year, imports about 963 tonnes of the precious metal each year.
Comments
kbaus
This is a good sign as the industry frees itself from government’s short seeing. Now when government tax created underground smuggling industry, it will be hard to fight it. It may be already too late for getting the full benefit of reducing the tax – the underground industry will stay reducing tax revenue every year over the years.
Governments sometime introduce silly tax which backfire. A few years back the worst treasurer in Australian history MR Swan introduced tax on expats hoping to skim the expats. The results, majority moved to live overseas and not spending their money in Australia. This worked a little tax in the first year as it was very vague who will be taxed. As it turns out, majority moved overseas and invest in the new countries. No tax for Mr Swan, high costs of enforcing compliance, no sales or GST taxes from expats and on top, the piraña status not willing to help developing countries. Also as the reality shows this tax forces Australian out of their country and therefore it shows as anti-Australian, against the constitution. Unwittingly, pushed by taxing to pay for his electoral “toys”, Mr Swan introduced anti-Australian tax. A challenge can be mounted to the High Court based on facts not intentions.
Mr Swan and his pack, during mining boom in Australia managed to move the country from no debt into $600billion debt. Such politicians should have been put on trail, similarly like top managers who mismanage a company.