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HT Explainer: Why gold smugglers have taken a shine to Chandigarh airport

Smugglers are under the impression that since the Chandigarh airport is new, the level of surveillance is not stringent in comparison to airports of big cities.

punjab Updated: Dec 23, 2017 12:34 IST
Vivek Gupta
Vivek Gupta
Hindustan Times, Chandigarh
gold smugglers,gold seizure,gold at airports
Price difference in Indian and other markets is a major trigger, besides purity of gold.(HT File/Representative)

With seizure of 4.5 kg of gold valued at Rs 1.25 crore in the past two weeks alone, the Chandigarh International Airport is turning out to be a favoured route for smuggling in the region. HT explains why, and answers other questions raised by this trend.

What makes Chandigarh favoured by gold smugglers?

Smugglers are under the impression that since the Chandigarh airport is new, the level of surveillance is not stringent in comparison to airports of big cities, a customs official said. “But the surveillance is high now. We have seized gold valued above Rs 3 crore in the past year,” he said.

How did it begin here?

It started with the commencement of international operations in September last year with Dubai and Sharjah flights. Bangkok flight was added this month.

What is the preferred route?

Barring a few cases from Sharjah, most of gold seizures were from Dubai-returned passengers. The price difference in Indian and Dubai markets is a major trigger behind smuggling, besides purity of gold. Per tola (10 gram) price difference in Indian and Dubai market is Rs 3,500 to Rs 4,000 for 24 carat gold. Smugglers earn up to Rs 5 lakh per kg. Also, there are strict rules on gold procurement in India, which too makes smuggling attractive.

What are the emerging routes?

Thailand’s capital Bangkok is a newly emerging route. After just 10 days of the first flight, the customs team seized 450-gm gold worth Rs 12 lakh from a passenger on Thursday. There is a price difference of Rs 2,000 to Rs 2,500 per tola between Indian and Thai markets. Moreover, Thailand is a stopover for many international destinations.

How much gold can passengers legally bring from abroad?

As per the current rules, holder of Indian passport, having six months’ continuous stay abroad, can bring up to 1kg of gold either in gold coins, biscuits, or other ornaments, on payment of 10% customs duty. If someone does not fulfil the six-month stay condition, the duty is 36%. Smugglers try to evade this hefty duty.

Is there any provision of duty-free gold?

Yes, the but quantity permitted is low and it has to be in the form of ornaments. A woman passenger is allowed to bring 40 grams of gold; 20 grams in case of male. But there is another rider. This, too, is only for those staying abroad for more than six months. It means that leisure travellers can’t bring any quantity of gold without paying duty. The local airport authorities seized gold chains and ornament from several Dubai-returned passengers, who were later made to pay 36% custom duty and penalty.

What’s the method?

Earlier this month, a smuggler from Delhi tried to sneak in with nearly 3kg gold by concealing it in a vacuum cleaner. In the past, smugglers have used coffee mugs, lunch boxes and even their body cavities to conceal the gold in an attempt to dodge the checks. Also, 1kg gold was found unclaimed inside a passenger seat. In Wednesday’s seizure, the gold was in the shape of ringlets inside the stitch buttons coated in white colour.

What kind of people are caught here?

A customs official said the gold is seized mostly from couriers working for larger nexus. They are paid Rs 15,000 per assignment. He said many of them revealed the identity of their handlers operating abroad, but they remained tightlipped on their Indian handlers, who are believed to be the masterminds. People from Punjab, Delhi and even Maharashtra were caught in different incidents.

What happens after the seizure?

Custom department confiscates the gold and begins adjudication process. An official said that in most of cases where couriers are involved, they don’t respond to showcause notices and thus avoid hearings to hide the nexus. In cases where adjudication is decided, the penalty reaches up to 90% of the smuggled gold’s value. Zonal commissioner of customs department decides the adjudication in cases where gold seizure is valued at Rs 20 lakh and above.

First Published: Dec 23, 2017 12:34 IST