Last July, the import duty on gold and silver was raised from 10 per cent to 12.5 per cent. This was resisted by the trade and is said to have resulted in more of smuggling. Hence, a proposal now to make gem and jewellery
dealers a reporting entity under the Prevention of Money Laundering Act (PMLA). Such a requirement had been imposed in August 2017 (for reporting transactions over Rs 50,000) but had been withdrawn in two months dur to operational issues.
“The earlier attempt on this created confusion. While rescinding this in October 2017, the government promised to notify under the PMLA a new threshold for reporting to authorities about transactions, with a view to curb parking of black money in bullion. This commitment, under the Financial Action Task Force, is yet to be realised,” said Arjun Raghavendra M, a Delhi-based advocate who previously worked for the government.
Globally, the sector is considered a high-risk one in the context of money laundering and terrorism funding. In India, though, the sector also generates high employment.
For high-value transactions, the new threshold is expected to be more liberal than the earlier one of Rs 50,000 limit where the PMLA is concerned.