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“There was a major decline in gold smuggling cases in the past four
months. The primary reason behind it is the disruption in all types of routes,
including sea and air, due to COVID-19, that has completely stopped hawala
transaction, a major chunk of which is used to illegally bring the yellow metal in
the country,” said a Customs Department source.
Besides, the Customs Authorities have been keeping strict vigil on cargo
movements from Bhutan, Taiwan, China, Afghanistan, South Korea, Japan, and
Dubai since January. They observed that majority of the smuggling in FY20 in
the precious metals was being done by Taiwanese Nationals and discovered a
syndicate smuggling foreign gold into India and smuggling out proceeds from
such sales.
Further, the Customs sleuths upped the guard, specifically after the
Government recently restricted the foreign direct investment under the automat-
ic route with a prior approval for all the neighbouring countries including China.
FY20 had kicked off with a rise in the gold metal smuggling as it seized
1,197 kgs. in the first quarter (April-June) of FY20, compared to 972 kgs. in the
first quarter of FY19. This was due to the rise in the import duty of gold as cus-
tomers had to shell out more during demand seasons.
Officials say that until June, the downward trend may continue due to
disturbance and screening on movements. However, the seizures may go up in
the second quarter as people’s interest in unofficial transaction may keep increas-
ing in the yellow metal as a safe haven option amid market volatility and dis-
rupted economies.
And this is why gold prices continue to soar, touching as high as ` 47,000
per 10 grams, when other sectors are facing the heat due to the lockdowns im-
posed in several countries to combat the pandemic.
A recent study by the World Gold Council said global gold demand dur-
ing the January-March quarter grew just 1 per cent to 1,083.8 tonnes. The total
supply also declined 4 per cent during the period as lockdowns disrupted mine
production and gold recycling, it said. The official gold demand would see the
modest growth for the rest of 2020 as effect of pandemic would remain till year
end, say experts.
During tire January-March period, the jewellery demand, too, saw a
drop of 40 per cent, which was 11-year low to 73.9 tonnes. Overall gold demand
in the March quarter slumped to almost 102 tonnes, compared to 159 tonnes a
year ago.
Analysis by the Customs Department reveals that in the past three years
there has been a significant increase in the number of gangs smuggling gold into
India and foreign currency out of the country.
In FY19, 1,102 Indians were arrested for smuggling in gold and 183 were
held for smuggling out foreign currency.
[Source : Business Standard, New Delhi, dated 4-5-2020]

EXCISE LAW TIMES  15th May 2020  55