Q665. How customs duty on gold/silver taken as baggage is calculated in India

Question: Dear Sir  Thanks for your information on taking Gold and Silver to India for NRIs and OCIs. This is of immense help and caution many people on what to expect and what to do legally. I have a question please which may be trivial but it is best to get answers from the forum that you run. Q: What authorities should I contact to get the latest information on Gold/Silver Bars that attract Duty % on the tariff value set by GOI. On 1 March 2014, it was set at USD 433 for 10 gm of Gold and USD 699 for 1Kg of Silver. I would like to know the duty percentage on these tariff please for Gold Bars and Silver bars. As this changes over time rapidly, who can give us the right and correct information (Duty %) as this is completely vague and erratically quoted even by customs officials. Will it be Indian embassy / consul general or direct contact with customs in India over phone...I highly doubt this will be answered. My parents ( 80 years old) landed in Chennai Airport and declared the silver bar 1Kg to customs officials. They live in Australia as Permanent residents and hold Indian Passports. They have been taken on a ride of unnecessary bullying for nearly 3 hours. They were prepared to pay the correct duty that is applicable for 1 Kg of Silver bar. The duty quoted by first customs officer was a whopping 37% on USD700 and the second official came and said that they needed to pay Rs 16,000 if they wanted to take it for use in India . The third official joined the parade saying that the statements made by the previous officials were incorrect and quoted Rs 16,000 even if they  leave it in customs bonded warehouse and take it back to Australia. My father was questioned when he contacted me as to what to do as he holds an additional credit card to pay for this. Then the officials discussed amongst themselves and asked him to pay for the DR ( detention Receipt) and take the silver bar back on return in 6 weeks time but still needed to pay Rs 16,000 on return to take it back to Australia. My father got the message that this is a highly dubious procedure (he is a retired income tax / sales tax officer himself) and wanted to see the Asst. commissioner there. Then he was taken to their cabin and the four people again had a round table conference and then asked him to pay 10.06% of duty on tariff value of USD 699. He paid that amount ( approx Rs4500) and received the Silver bar. If the fate for a old man who had a genuine case and wanted pay the duty applicable is like this...then what will be the fate for many young people who would take Gold for personal reasons being the sons or daughters working overseas for their parents for wedding or non-commercial purposes. I had instructed my parents not to pay even Rs1 as bribe and pay the applicable duty if levied.  Now this clearly raises a question on who could give the correct information on these matters...you said that in your website, please get it confirmed through authorities. We have clearly seen that the authorities made themselves collectively of no proper knowledge of the duty and have taken an old man for a ride for three hours!!! when he is ready to pay the duty. I am happy that it ended after three hours with the intervention and advise of the Asst commissioner (IRS) there. I just do not know how the 37% was reduced to 10.06% in the end. Is this correct? Your reply would be highly appreciated. Thanks Regards Australian citizen Answer:  I believe the rate you of customs duty you mention in your email: "On 1 March 2014, it was set at USD 433 for 10 gm of Gold and USD 699 for 1Kg of Silver" is not currently applicable. It was not applicable even in March 2014.

Understanding how customs duty on gold and silver is calculated in India

Basically there are two methods of applying customs duty. 1. Specific rate of duty o Specific rate is based on the quantity of the item, such as size, weight etc. For example, 10 grams of gold would attract a certain specified amount of customs duty. 2. Ad-Valorem rate of duty o Ad-Valorem rate of duty is based on the value of the item and NOT on the weight. My understanding is that as of January 17, 2012 the method of calculating customs duty on gold and silver, brought in as baggage was changed to what is called ‘“ad valorem rate of Duty’. This method uses the value of the item to calculate customs duty. Customs duty charges are now levied as a percentage of the value of the item. So instead of duty being calculated as x number of dollars for 10 grams of gold, we now have x percent of the value of the gold or silver brought in by the passenger. Education Cess Charge In addition to the customs duty, there is also a 3% Education Cess charge levied by the customs authorities in India. The Education Cess charge is applied only on the amount of applicable duty value. To clarify: Suppose a item is valued at Rupees 1000 and the duty of 10% and cess of 3% is applicable. In such a case, the duty would be: 10% of the value of 1000 = 100 3% of cess on the applicable duty which is 100 = 3 Total duty and cess would be 100 + 3 = 103   Currently the customs duty on silver is calculated at the rate of 6% Ad valorem. There is also a additional charge called educational cess of 3% added. The applicable rates can be changed by the government and notification in this regard are issued to the Customs departments. Being Informed of current rate of duty It is unfortunate that your elderly parents, after a long flight from Australia had to spend three additional hours sorting out the applicable customs duty. Your parents were aware of the rules and were able to get the matter settled satisfactorily. Many people would have simply paid what was asked. If your parents are up to it and wish to write down their experience at the airport, I will be glad to publish it on this site so others may learn from their experience. Regards to where one can get up to date information on applicable customs duty rates, you have actually listed all the avenues in your email. I do realize that sometimes its difficult to get information from government sources, however most of us have no alternative.  
Disclaimer: Information provided is for general knowledge only and should not be deemed to be professional advice. For professional advice kindly consult a professional accountant, immigration advisor or the Indian consulate. Rules and regulations do change from time to time. Please note that in case of any variation between what has been stated on this website and the relevant Act, Rules, Regulations, Policy Statements etc. the latter shall prevail. © Copyright 2006 Nriinformation.com
NriInformation Questions &Answers 
Read Disclaimer at bottom of page
next next previous previous
Custom Search
Search Nri Information
N
RI Information
Informing  educating and connecting Indians across the globe . . . by Virendar Chand
Custom Search
Search Nri Information
OCI Registration Easy Guide & Info
OCI Application info OCI Eligibility OCI Documents required OCI Advantages/Disadvantages
How to Renounce OCI When New OCI documents are required . . .  
OCI Guide for NRIs - Free info
more info
N RI Information on  twitter  Now Follow
Available worldwide from Amazon
Free delivery with Amazon Prime
nri guide v k chand Book for all NRIs PIO & OCI more info more info
Tips for NRIs when taking gold Jewelry to India . . . . . . . . . . . . . .  Walking out from Green Channel with jewelery on arrival . . . . . . . Getting Jewelry endorsed on Passport to take out of India  . . . . . Taking Gold Jewelry Out of India - Customs Duty  . . . . . . . . . . . . .
N RI Articles of interest on Taking Gold in or out of India more info more info

 

Q665. How customs duty on

gold/silver taken as baggage is

calculated in India

Question: Dear Sir  Thanks for your information on taking Gold and Silver to India for NRIs and OCIs. This is of immense help and caution many people on what to expect and what to do legally. I have a question please which may be trivial but it is best to get answers from the forum that you run. Q: What authorities should I contact to get the latest information on Gold/Silver Bars that attract Duty % on the tariff value set by GOI. On 1 March 2014, it was set at USD 433 for 10 gm of Gold and USD 699 for 1Kg of Silver. I would like to know the duty percentage on these tariff please for Gold Bars and Silver bars. As this changes over time rapidly, who can give us the right and correct information (Duty %) as this is completely vague and erratically quoted even by customs officials. Will it be Indian embassy / consul general or direct contact with customs in India over phone...I highly doubt this will be answered. My parents ( 80 years old) landed in Chennai Airport and declared the silver bar 1Kg to customs officials. They live in Australia as Permanent residents and hold Indian Passports. They have been taken on a ride of unnecessary bullying for nearly 3 hours. They were prepared to pay the correct duty that is applicable for 1 Kg of Silver bar. The duty quoted by first customs officer was a whopping 37% on USD700 and the second official came and said that they needed to pay Rs 16,000 if they wanted to take it for use in India . The third official joined the parade saying that the statements made by the previous officials were incorrect and quoted Rs 16,000 even if they  leave it in customs bonded warehouse and take it back to Australia. My father was questioned when he contacted me as to what to do as he holds an additional credit card to pay for this. Then the officials discussed amongst themselves and asked him to pay for the DR ( detention Receipt) and take the silver bar back on return in 6 weeks time but still needed to pay Rs 16,000 on return to take it back to Australia. My father got the message that this is a highly dubious procedure (he is a retired income tax / sales tax officer himself) and wanted to see the Asst. commissioner there. Then he was taken to their cabin and the four people again had a round table conference and then asked him to pay 10.06% of duty on tariff value of USD 699. He paid that amount ( approx Rs4500) and received the Silver bar. If the fate for a old man who had a genuine case and wanted pay the duty applicable is like this...then what will be the fate for many young people who would take Gold for personal reasons being the sons or daughters working overseas for their parents for wedding or non-commercial purposes. I had instructed my parents not to pay even Rs1 as bribe and pay the applicable duty if levied.  Now this clearly raises a question on who could give the correct information on these matters...you said that in your website, please get it confirmed through authorities. We have clearly seen that the authorities made themselves collectively of no proper knowledge of the duty and have taken an old man for a ride for three hours!!! when he is ready to pay the duty. I am happy that it ended after three hours with the intervention and advise of the Asst commissioner (IRS) there. I just do not know how the 37% was reduced to 10.06% in the end. Is this correct? Your reply would be highly appreciated. Thanks Regards Australian citizen Answer:  I believe the rate you of customs duty you mention in your email: "On 1 March 2014, it was set at USD 433 for 10 gm of Gold and USD 699 for 1Kg of Silver" is not currently applicable. It was not applicable even in March 2014. Understanding how customs duty on gold and silver is calculated in India Basically there are two methods of applying customs duty. 1. Specific rate of duty o Specific rate is based on the quantity of the item, such as size, weight etc. For example, 10 grams of gold would attract a certain specified amount of customs duty. 2. Ad-Valorem rate of duty o Ad-Valorem rate of duty is based on the value of the item and NOT on the weight. My understanding is that as of January 17, 2012 the method of calculating customs duty on gold and silver, brought in as baggage was changed to what is called ‘“ad valorem rate of Duty’. This method uses the value of the item to calculate customs duty. Customs duty charges are now levied as a percentage of the value of the item. So instead of duty being calculated as x number of dollars for 10 grams of gold, we now have x percent of the value of the gold or silver brought in by the passenger. Education Cess Charge In addition to the customs duty, there is also a 3% Education Cess charge levied by the customs authorities in India. The Education Cess charge is applied only on the amount of applicable duty value. To clarify: Suppose a item is valued at Rupees 1000 and the duty of 10% and cess of 3% is applicable. In such a case, the duty would be: 10% of the value of 1000 = 100 3% of cess on the applicable duty which is 100 = 3 Total duty and cess would be 100 + 3 = 103   Currently the customs duty on silver is calculated at the rate of 6% Ad valorem. There is also a additional charge called educational cess of 3% added. The applicable rates can be changed by the government and notification in this regard are issued to the Customs departments. Being Informed of current rate of duty It is unfortunate that your elderly parents, after a long flight from Australia had to spend three additional hours sorting out the applicable customs duty. Your parents were aware of the rules and were able to get the matter settled satisfactorily. Many people would have simply paid what was asked. If your parents are up to it and wish to write down their experience at the airport, I will be glad to publish it on this site so others may learn from their experience. Regards to where one can get up to date information on applicable customs duty rates, you have actually listed all the avenues in your email. I do realize that sometimes its difficult to get information from government sources, however most of us have no alternative.
N
RI Information
 Informing  educating and connecting Indians across the globe
NriInformation Questions &Answers 
Read Disclaimer at bottom of page
next next previous previous
twitter  Follow us on