India has imposed restrictions on the import of plain gold jewellery in an attempt to address loopholes in its trade policy, Reuters reports.
The government has moved the import of gold articles from the free category to the restriction category, according to a government notification. However, imports under the India-United Arab Emirates Comprehensive Economic Partnership Agreement will still be allowed without any license.
Addressing Policy Flaws
The decision comes in the wake of importers exploiting a policy flaw to source plain gold jewellery from Indonesia without paying any import taxes. “Indonesia was never a gold jewellery supplier to India, but in the last few months, bullion dealers imported 3-4 tonnes from Indonesia without paying any import taxes,” said a Mumbai-based dealer with a private bullion importing bank.
Closing the Loophole
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India imposes a 15% tax on gold imports. The policy change aims to close the loophole that allowed many dealers to source from Indonesia. “The policy change has closed that loophole,” the dealer added.
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