India Sees More Gold Smugglers Than Ever Before
India is receiving a new taxes on gold, which could mean more people smuggling gold into the country.
The Goods and Services Tax went from 1.2 percent to 3 percent on July 1. Now traders and buyers are seeking the black market to obtain their gold.
One buyer said that the hike in tax was too high for them and that they’d rather have to use receipts. This report was from a merchant at the Zaveri Bazaar market, which is in Mumbai
India Might See Moe Gold Being Smuggled Into Their Borders
Other small-time jewelers may look to selling without using receipts. If so, it might negatively effect big-time jewelers who chose to stick to the rules.
People were willing to go to far lengths in order to not pay an extra 1 percent before. Now with the 3 percent hike, who knows how buyers will be willing to go.
With India being the second largest consumer of gold, more merchants may be looking to smuggle gold into the country.
Since a series of hikes dating back to August of 2013, there has been widespread of smuggling within India. People do it to bring the demand down.
According to the World Gold Council, they believe that at least 120 tons of gold have been smuggled into India since 2016.
Aditya Pethe, one of the directors at Waman Hari Pethe Jewellers located in Mumbai, had something to say. She told reporters that the government should ban smuggling completely.
Legal imports within the country usually bring in close to around 800 tons of metal every year. The metal they receive can range anywhere from wedding gifts to donations to religious sanctuaries.
Daman Prakash Rathod from MNC Bullion, located in the southern regions of Chennai had a few words, as well. However, he believes that lower import duty will actually up legal imports.