Indian expats want gold duty scrapped

DUBAI // Indian expatriates are asking New Delhi to scrap a decades-old duty on gold.

Passengers arriving at Indian airports are being told to pay a tax on excess jewellery or leave the ornaments behind.

Non-resident Indians (NRIs) are upset that enforcement of the law, which was enacted in the 1960s, was introduced in April this year.

It means women carrying gold worth more than 20,000 rupees (Dh1,331), or more than seven grams, are taxed. Men can carry only half that amount before paying a duty.

KV Shamsudheen, chairman of the Pravasi Bandhu Welfare Trust, a social organisation, started a petition after travellers from Dubai were asked to pay a 10 per cent duty on the value of gold exceeding the limits.

"I was carrying about 276 grams of gold," said Shilin Kumar, who travelled from Dubai to Kerala at the end of last month.

"We had carried the gold in our hand baggage and, after screening our luggage, the customs officials asked us to pay duty. I explained that it was used gold but they did not agree."

After Mr Kumar refused to pay 40,000 rupees in tax, customs officials asked him to leave the jewellery in their custody.

"When I am leaving for Dubai I can collect it back from them at the airport, but this is not fair," he said. "We won't carry any jewellery the next time."

India is the world's largest buyer of gold, which is synonymous with weddings, festivals, traditions and financial security.

Another passenger to Kerala from Dubai last month also had to leave her jewels with airport officials.

"I was wearing about six bangles and had other jewellery," said the expatriate, who asked not to be identified. "I was asked to pay 33,000 rupees, but since I didn't have the money I left my ornaments behind.

"They have given me a receipt and assured me they are safe. I hope I get them back. I will never carry any gold from Dubai the next time."

Mr Shamsudheen is asking Indian authorities to reconsider what he calls a ridiculous move.

He said the limits were relevant five decades ago when gold prices were very low.

"The law that is being implemented now is more than 50 years old," Mr Shamsudheen wrote to the finance ministry. "At that time the gold price was 40 rupees for a gram … we request the prime minister intervene in this issue."

He said male passengers should be allowed to travel with at least 100 grams of gold and women with 200 before being taxed.

The Indian finance ministry was not available for comment.

pkannan@thenational.ae