Simplifying the Hindu News, Date 18 Sept, 2017
South Korea is not a big producer of gold. But in recent months, import of gold from that country to India has shot up remarkably. In the entire 2016-17 Indians imported gold worth $71 million whereas during July 1-August 3, 2017, it was around $340 million. The extraordinary increase in gold import from South Korea has caught the attention of the Govt. of India.
Increase in Gold Import Issue
- India has looked into the matter extensively and has come to the conclusion that Indian importers are misusing a provision signed by India with South Korea under CEPA (Comprehensive Economic Partnership Agreement) that allows duty-free import of gold and jewellery.
- It has to be noted here that India has provided 3% GST on gold.
- It is suspected that Indian firms are routing gold from Dubai to South Korea and then importing the same to India with least duty. There may be a criminal angle to such transactions as well.
- In the wake of above circumstances Govt of India has decided to restrict import of gold from South Korea by levying more duty on such transactions. In a bilateral meeting with South Korea India has decided to include tighter norms in the CEFA with the Govt. of Korea.