IBJA Urged Policy Change to Close Loophole in Gold Import Policy

SEATTLE (Scrap Monster): The Indian Bullion and Jewellers Association (IBJA) requested the Ministry of Finance to fix a loophole in the system which helps bullion importers to classify their refined gold imports as platinum alloy, which turn attracts a lower tax rate.

The classification of gold imports as platinum alloys is done to evade tax, as the applicable tax rate for platinum alloys are much lower at 10.75%, as compared with the higher import duty of 15% on gold. The importers are seen exploiting the loophole in the law, which costs the government crores in evaded tax.

As per the current notification, alloys that contain over 2% or more by weight of platinum could be treated as an alloy of platinum. By exploiting this rule, importers mark consignments which contain 96% gold and 4% platinum as consignments of platinum alloy. According to sources, around 22 tonnes of gold have been imported into the country by labelling them as consignments of platinum.

IBJA pointed out that the importers are not at faulty as the law permits them to do so. The government has to make necessary changes to plug this loophole and prevent any ambiguity, it said.

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