Jan 21, 2013, 09.10 PM IST

FinMin wants gold removed from India-Thailand FTA

Source: PTI

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Government is contemplating removing gold jewellery from the list of items allowed to be imported under the India-Thailand free trade pact as several traders are misusing provisions to bring the precious metal from the South East Asain nation. "We have taken up the issue with the Commerce Ministry," Revenue Secretary Sumit Bose told reporters here.

He was replying to a query on whether the Finance Ministry is pitching for removal of gold jewellery from the India-Thailand free trade agreement (FTA).

Also read: Govt hikes import duty on gold, platinum to 6%

The FTA with Thailand allows gold jewellery imports at a concessional customs duty of 1 per cent. This concessional rates make gold imports attractive, especially when considering that the duty for importing standard gold bars, gold coins and non-standard gold stand at up to 10 per cent.

The Department of Revenue Intelligence (DRI) has alleged that some traders are bypassing rules of origin norms to import gold under the FTA with Thailand. Under the rules of origin norms, a trader can import gold from Thailand if the value addition is 20 per cent. If strictly followed, sources said, the import of gold jewellery from Thailand should become less attractive as prices of gold in India and Thailand are the same.

India is a big consumer of gold and traditionally the demand for gold is met through imports. In April-December 2012 the gold imports stood at USD 38 billion, as against USD 56.5 billion in the full 2011-12 fiscal.