Gold smuggling on rise, Chennai accounts for maximum cases.

CHENNAI: While India is seeing a steady increase in gold smuggling, a recent report of the Enforcement Directorate says that Chennai accounts for the maximum number of gold seizures in the country when compared to other cities. The smuggling is on the rise because of the increase in import duty on gold and the huge gap between the demand and supply.

The Directorate of Revenue intelligence has seized 80kg of gold in Tamil Nadu until last week this year, but in the last four days alone about 45kg of gold being brought to Chennai has been impounded. More than 200kg of gold has been seized in the state in the last one year, officials said.

Showrooms and storehouses of leading gold merchants in Chennai, Coimbatore, Madurai, Kochi and Thrissur have been raided for their close links with smuggling cartels, which are adopting innovative ways to bring in the precious metal without paying duty.

"After a slowdown during the Lok Sabha elections, smuggling has picked up again. RBI norms that squeezed gold imports through legal channels could be seen as the main reason for the increase in smuggling," said a senior DRI official. The increase in import duty -- from 2% in 2012 to 12% now -- has brought down gold imports through the legal route.

Between June 2013 and March 2014, nearly 150kg of gold was seized from coastal villages in Nagapattinam, Rameswaram and Tuticorin. Officials said the gold was transported from Thalaimannar in Sri Lanka by fishing boats. The demand for gold has also revived the use of sea route for smuggling. The cartels bring gold from Dubai to the island nation and then smuggle it to India using small fishing boats.

While Chennai accounts for the major share of gold seizures at airports, other airports in the state have also witnessed a rapid increase in cases. The Trichy airport, for example, recorded 17 cases in the last one year, in which about 60kg of gold was seized. There have been 10 gold seizures at Coimbatore airport since November 2013.

Source : timesofindia.indiatimes.com