The Indian government has imposed restrictions on the import of raw gold and silver from the UAE. Only authorized importers will be allowed to import gold and silver.
The central government has taken a significant decision to curb the practice of importing gold from Dubai under the guise of platinum alloy by exploiting the trade agreement with the UAE.
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Raw, semi-finished, and powdered gold and silver
Restrictions have been imposed on the import of raw, semi-finished, and powdered gold and silver from the UAE. Only authorized importers will be able to import this type of gold and silver.
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CEPA
This means that this type of gold and silver can only enter the country through designated agencies, eligible jewelers, and importers recognized for tax exemption under the Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE.
India is allowed to import 200 metric tons of gold annually from the UAE with a 1% tax deduction under TRQ (Official Tax Reserve Rule). Some traders were cheating the government by importing 99% pure gold from Dubai labeled as platinum alloy and getting tax exemption.
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Harmonized System
To curb this type of fraud, this year's budget aimed to introduce a new HS (Harmonized System - tariff code) for the import of precious metals. Accordingly, a separate code has been introduced for pure platinum.
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Platinum alloy
Only the import of pure platinum with this code can get tax exemption under CEPA. Other platinum alloys will not get tax exemption. This will restrict the import of gold under the name of platinum alloy (1% platinum, 99% gold).
