Revenue Intelligence raided gold importers for importing gold from Thailand at 1% duty

DELHI: In a nationwide swoop, the Directorate of Revenue Intelligence on Thursday raided gold importers in many cities for importing gold from Thailand at concessional 1% duty.

The government had raised import duty on gold in an attempt to rein in imports, which are largely the reason for the country running up a huge trade and current account deficits. Gold imports increased in October and November after declining for seven months because of festival related demand.

Because of the high trade deficit, most experts now expect the current account deficit to come in close to the levels last year, an all time high 4.2% of GDP.

India-Thailand trade treaty allows for gold and jewellery imports at 1% duty. Though the nature of breach is not known yet, it could presumably be that the imports are actually third country gold that is routed through Thailand. In other words, the importers may be breaching the source of origin rules when they buy gold from Thailand.