454. Taking Gold to India from USA

to get Jewelery made . . .

Questions: Hello My family and I are planning to travel to india. Taking one gold coin (1 ounce = 32 gms) - 24 kt gold coin. We have four tickets (2 females and 1 male). We have OCI and are citizens of US. Do we owe any tax at the airport? We are taking this to get jewellery made out of this and take it back to US (meaning - not planning to cash this). Could you please let us know if we will be charged any tax at the airport for this? Thanks, Radha Iyer USA Answer: One ounce of gold @1575 per ounce, if calculated @Rs 55 to a dollar, works out to Rs. 86,625/- Since you mention the number of male and female travelers in your party, I assume you are trying to calculate the applicable duty free allowance on gold allowed to passengers arriving in India. As per current rules: Jewellery, free of duty, in bonafide baggage upto an aggregate value of Rs.10,000/- in the case of a male passenger or Rs.20,000/- in the case of a lady passenger. (see update below) [ As per Government of India, Ministry of Finance Notification No. 25/2013-Customs (N.T.) Dated March 1st 2013. This has been increased to Rupees 50,000 fro men and to Rupees 100,000 for female passengers. Click HERE to view govt notification ] Using the allowance for two females and one male member, you reach a total of Rupees 50,000, which leaves a balance of Rupees 36,625 on which taxes can be charged. There are however two points to consider: 1. While some countries may allow family members to pool their duty free allowance when traveling together, India, I believe does not. As per CBEC, ‘The free allowance shall not be pooled with the free allowance of any other passenger.’ If pooling of duty free allowance is not allowed, the maximum duty free claim that could be claimed would be Rs. 20,000/- 2. As per rules in India, duty is charged on gold in any form other than ornaments. In other words, only ornaments qualify for the duty free allowance. Depending on the marking on the gold coin you have, it will be up to the customs officer in India to decide. As the price of gold as shot up worldwide and gold prices appear to be shooting up steadily, there have been reports in the Indian media about travelers to India being searched for gold ornaments by customs officials at major airports across the country. Passengers carrying solid gold regardless of the amount or jewelery over the duty free allowance, should declare the gold. Chances are it may be allowed duty free or even if tax in the form of customs duty is charged, the rate of customs duty is reasonable. There is no point in taking the risk of having your gold confiscated or paying penalties due to non declaration. Customs duty on gold in USA I would like to mention also that since you are taking the gold from USA to get jewelery made in India, as per U.S. customs rules, when components such as gold, are sent overseas for assembly or processing, and then returned back to the USA having gone through a substantial transformation while overseas, duty is required on the total cost incurred while overseas, including the cost of the components or materials. The value of gold taken overseas to be made into jewelry cannot be subtracted from the value of jewelry when it is reentered into the U.S. [https://help.cbp.gov/app/answers/detail/a_id/444/kw/duty%20r ates%20for%20gold%20jewelry] Hence, on your return to USA, you may be charged customs duty on the value of the gold/jewelery that is over your duty free allowance.