600 kg gold imports from Indonesia; govt mulling curbs

New Delhi: Worried over a surge in gold imports from Indonesia that crossed 600 kg in the last two months, the government is considering ways to check the increase in the in-bound shipments, a government official said.

A decision to this effect is expected this week only, the official added.

The government has recently imposed restrictions on imports of the precious metal from South Korea on account of jump in gold imports from that country.

Because of this, the official said, the in-bound shipments are now increasing from Indonesia.

The imports in the case of Indonesia are different from those of Korea as the gold coming from the South-east Asian island nation is mostly mined gold whereas from South Korea, it was originating in some other country and was being routed through Korea for value addition prior to exports.

"Over 600 kg of gold came in from Indonesia in the last two months. We are looking into it and a decision is likely by the end of the week," the official said.

Importers have been taking advantage of the free trade agreement between India and the Association of South East Asian Nations (Asean) with which a free trade agreement is in place since 2009. Under this pact, the basic Customs duty on gold is nil.

Indonesia is a member of the 10-nation Asean group.

Following the rollout of Good and Services Tax (GST), a 3 per cent Integrated GST (IGST) is being levied on gold imports. This compares to the earlier 12.5 per cent countervailing duty imposed prior to July 1, thereby making imports cheaper.

Officials from Customs, Commerce and the Reserve Bank would meet this week to decide on what could be the possible way to deal with this import surge.