Duty on Gold & Silver Imported by Eligible Passengers.
Date:
Monday, 4 June 2012
For Representational Purpose Only
"I propose to increase basic customs duty on standard gold bars, gold coins of purity exceeding 99.5% and platinum from 2% to 4% and on non-standard gold from 5% to 10%," Finance Minister Shri Pranab Mukherjee said in his Budget speech.
I am pondering here on the change of duty structure from a fixed amount to advalorem rates rather than speculating on the doubling of the duty rates. Import of gold upto 10 kilograms by an “eligible passenger” was hitherto, i.e. before 15.01.2012 to be precise, was covered under the customs tariff notifications No. 31/2003-Cus., dated 01.03.2003 while the import of silver upto 100 kilograms by the notification No. 172/94-Cus., dated 30.09.1994 both amended vide notifications No. 78/2009 dated 07.07.2009 and No. 17/2010-Cus., dated 27.02.2010. The rates prevailing before the recent changes were as below:
|
S. No.
|
Description of goods
|
Basic Duty
|
Additional Duty
|
Education Cess
|
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
1.
|
Gold bars, other than tola bars, bearing manufacturer’s or refiner’s engraved serial number and weight expressed in metric units, and gold coins
|
Rs. 300 per 10 gms.
|
Nil
|
@3%
|
|
2.
|
Gold in any form other than at S. No. 1 above, including tola bars and ornaments, but excluding ornaments studded with stones or pearls
|
Rs. 750 per 10 gms.
|
Nil
|
@3%
|
|
3.
|
Silver, in any form including ornaments (but excluding ornaments studded with stones or pearls)
|
Rs. 1500 per kgs.
|
Nil
|
@3%
|
The last two decades have seen fixed amounts of import duty in terms of gms. and kgs. being specified in the case of gold and silver which was easy to comprehend and estimate, both for the passengers paying it and for the customs officers levying and recovering it. The duty rates through the years are as shown in the table below:
|
Description of goods
|
Duty
|
Notification No.
|
|
(1)
|
(2)
|
(3)
|
|
Gold, in any form including ornaments (but excluding ornaments studded with stones or pearls)
|
Rs. 450 per ten grams
|
117/92-Cus., dated 01.03.1992
|
|
Rs. 220 per ten grams
|
171/94-Cus., dated 30.09.1994
|
|
Rs. 250 per ten grams
|
28/98-Cus., dated 02.06.1998
|
|
Rs. 400 per ten grams
|
2/99-Cus., dated 04.01.1999
|
|
Rs. 250 per ten grams
|
20/2001-Cus., dated 01.03.2001
|
|
Gold bars, other than tola bars, bearing manufacturer’s or refiner’s engraved serial number and weight expressed in metric units, and gold coins
|
Rs. 100 per ten grams
|
31/2003-Cus., dated 01.03.2003
|
|
Rs. 200 per ten grams
|
78/2009-Cus., dated 07.07.2009
|
|
Rs. 300 per ten grams
|
17/2010-Cus., dated 27.02.2010
|
|
Gold in any form other than at S. No. 1 above, including tola bars and ornaments, but excluding ornaments studded with stones or pearls
|
Rs. 250 per ten grams
|
31/2003-Cus., dated 01.03.2003
|
|
Rs. 500 per ten grams
|
78/2009-Cus., dated 07.07.2009
|
|
Rs. 750 per ten grams
|
17/2010-Cus., dated 27.02.2010
|
|
Silver, in any form including ornaments (but excluding ornaments studded with stones or pearls)
|
Rs. 500 per kilogram
|
4/93-Cus., dated 08.02.1993
|
|
Rs. 500 per kilogram
|
172/94-Cus., dated 30.09.1994
|
|
Rs. 1000 per kilogram
|
78/2009-Cus., dated 07.07.2009
|
|
Rs. 1500 per kilogram
|
17/2010-Cus., dated 27.02.2010
|
If one looks at the history of gold import, it can be seen that until the Gold (Control) Act, 1968 was repealed in the year 1990 and the liberalized gold import was allowed through the baggage mode in the year 1992, it was under complete prohibition. This relaxation of gold import through the “eligible passengers” of Indian origin or Indian passport holders coming to India after a stay of at least six months abroad, allowed from 01.03.1992 was augmented, vide notification No. 171/94-Cus., dated 30.09.1994, permitting them to import it within 15 days of their arrival in India or to purchase it from the bonded warehouses in case they declare their intention and pay duty on arrival. Similarly, in the case of silver import, while notification No. 4/93-Cus., dated 08.02.1993 authorised import of 100 kilogrammes of silver as baggage the notification No. 172/94-Cus., dated 30.09.1994 sanctioned it to be imported within 15 days of arrival of the passenger or to be purchased from bonded warehouses of SBI or MMTC. This also necessitated imports of gold stocks by the banks and other nominated agencies. Further changes such as different rates for standard and non-standard bars and increased quantity of 10 kilogrammes were announced from 01.03.2003 and 01.01.1997 respectively while 100 kilogrammes of silver was being allowed since 1993 itself. All these imports were permitted on a condition that duty is paid in convertible foreign currency also.
The fixed rates of duty hitherto levied were changed to an advalorem percentage basis vide notification No. 3/2012-Cus., dated 16.01.2012. This came with a monthly dose of notified tariff value for gold and silver under sub-section (2) of section 14 of the Customs Act, 1962.
|
S. No.
|
Description of goods
|
Rate
|
|
(1)
|
(2)
|
(3)
|
|
1.
|
Gold bars, other than tola bars, bearing manufacturer’s or refiner’s engraved serial number and weight expressed in metric units, and gold coins having gold content not below 99.5%
|
2%
|
|
2.
|
Gold in any form other than at S. No. 1 above, including tola bars and ornaments, but excluding ornaments studded with stones or pearls
|
5%
|
|
3.
|
Silver, in any form including ornaments, but excluding ornaments studded with stones or pearls
|
6%
|
It has now been amalgamated and merged with the notification No. 12/2012–Cus., dated the 17th March, 2012 (r/w corrigendum) which prescribes concessional rate of duties for items under chapter 1 to 98 of the Customs Tariff Act, 1975 (51 of 1975) Schedule I as shown below:
|
S. No.
|
Chapter or
Heading or
sub–heading
or tariff item
|
Description of goods
|
Standard
rate
|
Additional
duty rate
|
Condition
No.
|
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
|
321.
|
71 or 98
|
(i) Gold bars, other than tola bars, bearing manufacturer’s or refiner’s engraved serial number and weight expressed in metric units, and gold coins having gold content not below 99.5%, imported by the eligible passenger
|
4%
|
Nil
|
35
|
|
(ii) Gold in any form other than (i), including tola bars and ornaments, but excluding ornaments studded with stones or pearls
|
10%
|
Nil
|
35
|
|
322.
|
71 or 98
|
Silver, in any form including ornaments, but excluding ornaments studded with stones or pearls, imported by the eligible passenger
|
6%
|
Nil
|
35
|
The said notification No. 12/2012-Customs dated 17th March, 2012 issued to give effect to the budgetary proposals originally included only gold bars, other than tola bars as per entry at Sr. No. 321 which was corrected by a corrigendum issued subsequently adding the tola bar and gold jewellery therein. However, since the notification No. 3/2012 was rescinded vide notification No. 22/2012-Cus., dated 17.03.2012 making the notification No. 19/2012-Customs (NT) dated 15.03.2012 notifying the tariff value for gold ineffective till the issue of subsequent notification No. 23/2012-Customs (NT) dated 21.03.2012. It is not clear how the tariff value of gold and silver would be worked out during the intervening period, i.e. from 17.03.2012 to 20.03.2012.
The tables below show the duty calculations as per the changes effected in the exchange rates of the foreign currency notified on a monthly basis and the frequent changes in the tariff rates:
(i) Gold bars, other than tola bars, bearing manufacturer’s or refiner’s engraved serial number and weight expressed in metric units, and gold coins having gold content not below 99.5%, imported:
|
Date (w.e.f.)
|
Tariff Value
|
Rate of Exchange
|
Value of 10 gms Gold (Rs.)
|
BCD on 10 gms (Rs.)
|
Education Cess (Rs.)
|
Total Duty on 10 gms (Rs.)
|
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
(7)
|
|
21.03.2012
|
573
|
49.40
|
28,306.20
|
1,132.25
|
33.97
|
1,166.22
|
|
22.03.2012
|
530
|
49.40
|
26,182.00
|
1,047.28
|
31.42
|
1,078.70
|
|
30.03.2012
|
539
|
49.40
|
26,626.60
|
1,065.06
|
31.95
|
1,097.02
|
|
01.04.2012
|
539
|
51.50
|
27,758.50
|
1,110.34
|
33.31
|
1,143.65
|
|
16.04.2012
|
542
|
51.50
|
27,913.00
|
1,116.52
|
33.50
|
1,150.02
|
|
30.04.2012
|
541
|
51.50
|
27,861.50
|
1,114.46
|
33.43
|
1,147.89
|
|
01.05.2012
|
541
|
53.10
|
28,727.10
|
1,149.08
|
34.47
|
1,183.56
|
|
15.05.2012
|
507
|
53.10
|
26,921.70
|
1,076.87
|
32.31
|
1,109.17
|
|
25.05.2012
|
507
|
55.95
|
28,366.65
|
1,134.67
|
34.04
|
1,168.71
|
|
31.05.2012
|
501
|
55.95
|
28,030.95
|
1,121.24
|
33.64
|
1,154.88
|
(ii) Gold in any form other than (i), including tola bars and ornaments, but excluding ornaments studded with stones or pearls:
|
Date (w.e.f.)
|
Tariff Value
|
Rate of Exchange
|
Value of 10 gms Gold (Rs.)
|
BCD on 10 gms (Rs.)
|
Education Cess (Rs.)
|
Total Duty on 10 gms (Rs.)
|
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
(7)
|
|
21.03.2012
|
573
|
49.40
|
28,306.20
|
2,830.62
|
84.92
|
2,915.54
|
|
22.03.2012
|
530
|
49.40
|
26,182.00
|
2,618.20
|
78.55
|
2,696.75
|
|
30.03.2012
|
539
|
49.40
|
26,626.60
|
2,662.66
|
79.88
|
2,742.54
|
|
01.04.2012
|
539
|
51.50
|
27,758.50
|
2,775.85
|
83.28
|
2,859.13
|
|
16.04.2012
|
542
|
51.50
|
27,913.00
|
2,791.30
|
83.74
|
2,875.04
|
|
30.04.2012
|
541
|
51.50
|
27,861.50
|
2,786.15
|
83.58
|
2,869.73
|
|
01.05.2012
|
541
|
53.10
|
28,727.10
|
2,872.71
|
86.18
|
2,958.89
|
|
15.05.2012
|
507
|
53.10
|
26,921.70
|
2,692.17
|
80.77
|
2,772.94
|
|
25.05.2012
|
507
|
55.95
|
28,366.65
|
2,836.67
|
85.10
|
2,921.76
|
|
31.05.2012
|
501
|
55.95
|
28,030.95
|
2,803.10
|
84.09
|
2,887.19
|
(iii) Silver, in any form including ornaments, but excluding ornaments studded with stones or pearls, imported by the eligible passenger:
|
Date (w.e.f.)
|
Tariff Value
|
Rate of Exchange
|
Value of 1 kg. of Silver (Rs.)
|
BCD on 1 kg. of Silver (Rs.)
|
Education Cess (Rs.)
|
Total Duty on 1 kg. (Rs.)
|
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
(7)
|
|
21.03.2012
|
1036
|
49.40
|
51,178.40
|
3,070.70
|
92.12
|
3,162.83
|
|
22.03.2012
|
1036
|
49.40
|
51,178.40
|
3,070.70
|
92.12
|
3,162.83
|
|
30.03.2012
|
1032
|
49.40
|
50,980.80
|
3,058.85
|
91.77
|
3,150.61
|
|
01.04.2012
|
1032
|
51.50
|
53,148.00
|
3,188.88
|
95.67
|
3,284.55
|
|
16.04.2012
|
1051
|
51.50
|
54,126.50
|
3,247.59
|
97.43
|
3,345.02
|
|
30.04.2012
|
1051
|
51.50
|
54,126.50
|
3,247.59
|
97.43
|
3,345.02
|
|
01.05.2012
|
1011
|
53.10
|
53,684.10
|
3,221.05
|
96.63
|
3,317.68
|
|
15.05.2012
|
920
|
53.10
|
48,852.00
|
2,931.12
|
87.93
|
3,019.05
|
|
25.05.2012
|
920
|
55.95
|
51,474.00
|
3,088.44
|
92.65
|
3,181.09
|
|
31.05.2012
|
899
|
55.95
|
50,299.05
|
3,017.94
|
90.54
|
3,108.48
|
The hapless passenger has to once again convert the duty shown in the last columns in Indian rupees to any foreign currency which he chooses to pay, since these rates are fixed by the banks on a daily basis independent of the CBEC fixed rates! The new changes has definitely made it difficult for an ordinary passenger to compute the duty payable by him before making a decision to bring in some gold. Can’t we continue with the simple and fixed per gram duty rates prevalent for the last two decades?
*****
Author : M.P. Vasudevan - 04-06-2012
|