With the ongoing coronavirus pandemic disrupting economies and markets, safe-haven options such as gold have increasingly become the choice of investment. Gold prices continue to soar, touching as high as Rs 47,000 per 10 gram last week, even as other sectors take a hit amid lockdowns employed by various countries to combat COVID-19.
But this increased interest in the precious metal has also fuelled another sector – smuggling, the Hindu BussinessLine reported.
The Customs Office at Chennai International Airport in Tamil Nadu, in particular, has recorded an all-time high in smuggling activity during FY20. As much as 375 kg of gold valuing Rs 134 crore was seized compared to 271 kg of gold valuing Rs 87 crore in FY19, the report noted.
Total 924 cases of smuggling were booked, compared to 461 in FY19 – a 100 percent jump. The number of arrested also increased from 56 to 136 year-on-year (YoY), data from Chennai Customs showed.
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Another factor that can be attributed to the spike in smuggling is the increase in customs duty from 10 percent to 12.5 percent, and increase in GST from 1 percent to 3 percent. There is also the 5 percent additional GST charge on making of gold ornaments.
All these, coupled with the rupee depreciation against the US dollar and the already high price of the metal, have pushed up the cost of legal import, N Anantha Padmanaban, Chairman, All India Gem and Jewellery Domestic Council (GJC) told the paper.
“Today, if anyone brings 1 kg of gold (through smuggling), they earn more than Rs 6 lakh. Unfortunately, people who were not willing earlier have also started doing it and that’s the reason why you see news about smuggling every one or two hours,” Padmanaban added.
Among the methods used are concealing the gold in laptops, hard-disks, skateboards, packed food tins or even in the rectum. On February 14, Chennai Customs caught a passenger smuggling 1,164 gm of gold worth Rs 44.33 lakh in a meat cleaver, it added.Follow our full COVID-19 coverage here