Q.836 How much Custom Duty to

pay if gold is detained at airport

Question: Hello, I just had a small concern. We went to Dubai for Vacation & while going we took 4 Bangles(wt Approx 60Gm) wearing & we exchanged the bangles in dubai for New Design & paid the difference amount of 900 dhirams only (INR - 16200). Unfortunately while returing custom officer detained it & said it is not allowed to carry so much.& asked us to pay Custom duty of around 36%. I am resident of India I had relavites in dubai & went for vacation for 10 days. So my question is 1 While i had only paid 16000 for exchange bangle & I had bills also which clearly says that value to new gold & Old gold & differnce paid. 2 So why should I pay 36% which comes to around 43000/- 3 Hou much amount should I pay or what should be done in this case. Please your openion will be appreciated. Thanks & Regards, Prakash Hiranandani [January 9, 2016] Answer: While I understand your concern and reluctance to pay the customs duty demanded by the authorities, the applicable rules do require that the customs duty be paid as calculated by the customs officers in India. Customs duty levied here is based on the value of the goods brought into India. The method of payment does not make a difference. Whether one buys gold abroad by paying in cash or kind, makes no difference. Anything over and above the free allowances is charged customs duty @ 35% + an education cess of 3% which makes duty payable @ 36.05%.

Take Gold from USA to get Jewelry

made in India

For the benefit of US Nri’s who may be reading this page, kindly be aware that if a person buys gold in the United States and takes it India to get jewelry made. On returning to the United States, they would have to pay customs duty on the fair market value of the gold jewelry without getting any deduction for the amount of gold that was actually purchased in the United States. An excerpt from the U.S. Customs and Border Protection information pages regarding gold jewelry brought into the United States from abroad is provided below: ‘For instance, if you take gold to India, where it is then made into jewelry, the gold can not be re- entered into the U.S. free of charge. Nor is the value of the gold deductable from the value of the finished jewelry.’

Leaving India with Gold Jewelry

Passengers leaving India have an option to take the export certificate for items such as gold jewelry from the Indian Customs authorities. Such an export certificate can help facilitate re- importation of such goods if the passenger decides at some point of time to bringing back the items to India. No duty would be charged on production of the export certificate. Another advantage of having the Export Certificate is that the duty free concessions of the passenger would not be affected and can be used on other items.