Gold Smuggling - Import Duty on Standard Gold in India

Government's attempts to rein in gold imports fuel smuggling

The government's attempts to rein in gold imports by increasing the customs duty seem to have resurrected the 'tola' bars or unnumbered bars, a favouriteof smugglers and money launderers. 

"The trend does not augur well... Tola bars are unnumbered and, therefore, tracking them is very difficult,

The import duty on standard gold has risen from nil to 6 per cent in the last fiscal. 

The tola bars were a favourite of the Mumbai underworld and the DRI had to request the government to raise duties on these bars. The government started imposing higher import duty on tola bars since 2003. The move slowly killed the manufacturing of tola bars globally because the 10 per cent duty differential made them unviable in India through the official route.