GOLD LIMITS UNDER BAGGAGE RULES: ECONOMY

GOLD LIMITS UNDER BAGGAGE RULES: ECONOMY

NEWS: CBIC need to reassess gold limits under Baggage Rules: Delhi HC

 

WHAT’S IN THE NEWS?

The Delhi High Court has urged the CBIC to revise gold jewellery limits under the Baggage Rules, 2016, citing outdated caps that fail to reflect current market rates, thereby causing undue hardship to genuine travellers and facilitating gold smuggling.

1. Context

  • The current rules impose low permissible limits for carrying gold jewellery, resulting in frequent seizures of jewellery from travellers.
  • The discrepancy between the rules and market rates of gold has led to harassment of genuine passengers, such as tourists or those attending weddings in India.
  • The court stressed the need to prevent misuse of rules while making processes traveller-friendly.

2. Key Rules Under Baggage Rules, 2016

  • Legal Basis: Section 79 of the Customs Act, 1962.
  • Current Jewellery Limits:
  • Men: Up to 20 grams (value capped at ₹50,000).
  • Women: Up to 40 grams (value capped at ₹1,00,000).
  • Conditions:
  • Applicable to passengers who have stayed abroad for more than one year.
  • Jewellery exceeding the prescribed limits must be declared at customs, with applicable duties paid.

3. High Court’s Observations

  • Outdated Limits:
  • Rising gold prices have rendered the ₹1,00,000 cap for women (40 grams) and ₹50,000 for men (20 grams) inadequate.
  • Frequent Seizures:
  • Minor jewellery often carried by travellers for personal or social purposes (e.g., weddings) is being seized, causing harassment.
  • Clarity for Travellers:
  • The Declaration Form and baggage rules lack proper communication, leaving many unaware of their obligations to declare jewellery exceeding prescribed limits.

4. CBIC’s Enforcement Challenges

  • Gold Smuggling:
  • Short-term travellers are frequently suspected of smuggling gold into India under the guise of personal jewellery.
  • Genuine Cases Overlooked:
  • Tourists and OCI/PIO cardholders attending events in India face cumbersome procedures for carrying legitimate jewellery.
  • Filing declarations for minor quantities creates unnecessary obstacles, discouraging foreign visitors.

5. About the Central Board of Indirect Taxes and Customs (CBIC)

  • Overview:
  • Part of the Ministry of Finance and responsible for indirect tax administration in India.
  • It oversees Customs, GST, IGST, and Central Excise duties.
  • Functions:
  • Policy formulation for tax collection.
  • Prevention of smuggling and evasion of taxes.
  • Administration of customs operations at international and domestic checkpoints, such as airports, seaports, SEZs, and land customs stations.
  • Structure:
  • Headed by a Chairman and supported by divisions like Custom Houses, GST Commissionerates, and the GST Intelligence wing.

6.  Why Is This Issue Significant?

  • Impact on Tourism: Outdated rules discourage tourists and foreign visitors, reducing India’s attractiveness as a destination for weddings and social events.
  • Economic Implications: The rise in smuggling due to restrictive limits results in revenue loss for the government.
  • Judicial Push: The High Court’s directive signals the need for updating policies to reflect contemporary realities, balancing enforcement with traveller convenience.

Source: https://www.thehindu.com/news/national/cbic-need-to-reassess-gold-limits-under-baggage-rules-delhi-hc/article69109254.ece#:~:text=The%20Delhi%20High%20Court%20has,current%20market%20value%20of%20gold%E2%80%9D