Post GST, cases of gold smuggling have increased, say Mumbai airport officials

Mumbai city news: After the number of smuggling cases fell briefly during the holiday season, they have risen once more, said sources

Expecting a spurt in the number of gold smuggling cases during the festive season, the Air Intelligence Unit (AIU) of the Mumbai customs is gearing up to tackle this problem.

A few jewellers may try to buy gold from dubious sources, which may lead to a further increase in the number of smuggling cases.(HT File)

Owing to the marginal hike in taxes on gold under the goods and services tax (GST), such cases have increased, said sources. The tax on gold has jumped from 1.2% to 3%. 

After the number of smuggling cases fell briefly during the holiday season, they have risen once more, said sources. “There was a temporary lull in smuggling at the city airport as the prices of flight tickets shot up during the holidays, making carriers reluctant to travel. However, after GST was introduced, cases of smuggling have steadily increased,” said a senior AIU officer. 

A few jewellers may try to buy gold from dubious sources, which may lead to a further increase in the number of smuggling cases. Consumers and jewellers may also try to conduct under-the-counter transactions, said sources.

“We have seen recent cases of smugglers hiding small quantities of gold in their rectum. After having assessed the impact of GST on the Indian economy, they may try to smuggle more gold into the country,” said the officer.

As the value of gold differs in every country, smugglers are trying to cash in on this advantage. “Prices of gold are higher in India, compared to other countries,” said a jeweler. “If a smuggler buys 10 grams of gold in Dubai, he could sell it for Rs3,500 more in India. If he buys a 1-kg gold bar, he could earn up to Rs3.5 lakh,” he added. He said carriers and smugglers find this increased price margin lucrative. 

Officials vigilant

AIU investigations revealed that gold is mostly smuggled into the country from Dubai, Bangkok, Singapore, Colombo, Muscat, Kuwait, Sharjah, Abu Dhabi, Hong Kong, Madagascar, Mauritius and Nairobi. Some of these places are free ports, which are not under heavy scrutiny.

A large chunk of ‘carriers’ are sent abroad to smuggle gold into the country on their return.

The AIU relies on passenger profiling to detect cases of gold smuggling. Suspicious passengers are questioned regarding the purpose of their visit. If their replies are evasive, they are frisked and checked.