Zero-duty import of Gold by a large PSU company has come under the scanner, sources told BW. India levies a 14.35 per cent duty on the import of Gold Dores (unrefined gold) but some refiners like MMTC, a public sector entity and PAMP, a Switzerland company, were importing dores from least developed countries (LCDs) on zero duty.
Gold doré refers to a bar composed of a mixture of precious metals, though these bars generally contain gold and silver.
A few months ago, the government had warned local refiners from importing gold dores from LCDs and even taken away licenses from a few but some like MMTC-PAMP had continued their imports, the sources said.
LCDs are in some African nations and India has exempted tax on imports of several items from these countries as per the international treaty norms to help poor countries.
The United Nations and the World Trade Organisation facilitate such treaties and hence it is not easy for the government to restrict imports from these countries, the sources said. But the government turned mindful of the increased volumes of Gold dores from LDCs, which hurt its tax revenues since it was brought to the notice that Gold dores were among the items that were being imported from LDCs.
In July 2023, the government instructed all domestic bullion refineries to submit their original licences for restricted imports. In the government’s view. suitable amendments to specific licence conditions were required. Reportedly, MMTC-PAMP was among those who did not submit its licence or give the undertaking. Instead, it waited for the government to give them written instructions.
When other gold refiners in India had stopped Gold dore imports from LDCs following government instructions, MMTC-PAMP had imported 10.5 tons of Gold dore from LDC at zero duty. The Director General of Foreign Trade (DGFT) is investigating the matter, the sources said.
An email sent to MMTC-PAMP remained unanswered. Their replies will be added to the story as and when received.
