Trading in gold seems to have become so lucrative in recent months that even rice mill owners have shifted their focus to foreign trade in precious metals instead of the humble food grain.<\/p>\n
The gold rush has, however, meant that the government is grappling with a current account deficit as $41 billion worth of gold was traded in the past one year, constituting 11% of the total imports in 2010-11.<\/p>\n
Before raising the duty on gold in the 2012-13 Budget, the government asked its revenue intelligence agencies to look into the reasons behind this sudden rise.<\/p>\n
A raid by the Directorate of Revenue Intelligence on a rice mill owner at the Noida Special Economic Zone revealed that during the last three months this entity alone had traded in gold worth Rs.1,700 crore. DRI has sought the company\u2019s full year\u2019s trading details as it suspects that the annual turnover from the yellow metal could be more than Rs.4,000 crore from the SEZ, raising doubts on the possibility of money laundering.<\/p>\n
Significantly, despite the fact that the government had imposed curbs on the circular trading of gold and diamonds, it was found that the rice mill owner had imported the metal from Dubai and exported the consignments to Dubai the very next day without adding much value to the goods.<\/p>\n
Sources said three other rice mill owners are under the DRI scanner for circular trading in gold while it has found that applications from half-a-dozen others are pending for approval seeking permission to trade in the precious metal.<\/p>\n
What is so lucrative about gold imports and its export without adding any value? A senior DRI official said these traders by doing such circular trading enhance their company turnover which helps them in procuring big loans from banks and financial institutions for their other group businesses. <\/p>\n
Besides, high turnover, these companies earn a star export house status that brings with it many concessions. In addition, group companies of such high-turnover exporters get up to 30% exemption on income tax for the group, the official said.<\/p>\n
Circular trading of gold, platinum and palladium out of Noida SEZ has been going on for past several years with the Commerce ministry failing to curb the practice despite several cases coming to light pointing out irregularities and suspicion of money laundering in the garb of gold and diamond trades.<\/p>\n
Few years ago when the DRI had conducted a survey on similar traders who were self-proclaimed exporters, with connections in Dubai and Singapore, it was found that they were minting money by exploiting the scheme which offers lucrative incentives against export credits.<\/p>\n
The modus operandi in many cases reveal these so called exporters, import gold, platinum and palladium from Dubai allegedly for \u201cmanufacturing jewellery\u201d. <\/p>\n
They import consignments on letter of credit (LC), export the same consignment the very next day, without any value addition, and receive payments. <\/p>\n
This payment is put in fixed deposits in Indian banks for a period of one year (the period of the LC) earning a high rate of interest as compared to interest offered in foreign countries. With the trades in several thousands crores, the earnings of the operators in Dubai and India are in hundreds of crore in Indian currency.<\/p>\n","protected":false},"excerpt":{"rendered":"
Trading in gold seems to have become so lucrative in recent months that even rice mill owners have shifted their focus to foreign trade in precious metals instead of the humble food grain. The gold rush has, however, meant that the government is grappling with a current account deficit as $41 billion worth of gold […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-85004","post","type-post","status-publish","format-standard"],"_links":{"self":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/85004","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/comments?post=85004"}],"version-history":[{"count":0,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/85004\/revisions"}],"wp:attachment":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/media?parent=85004"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/categories?post=85004"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/tags?post=85004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}