The objective is to pay a lower import duty, which is 10.75% on platinum alloy against 15% on gold.
Nearly 22 tonnes of gold were imported through this route, industry sources said, adding that it was causing a revenue loss of over 400 crore for the government. The India Bullion & Jewelers Association (IBJA) has meanwhile written to the Ministry of Finance, asking to change the policy.
According to the customs notification that helps bullion importers, “Any alloy (including sintered mixture and intermetallic compound) containing a precious metal must be treated as an alloy of a precious metal if a precious metal constitutes up to 2% by weight of the alloy and, therefore, an alloy containing 2% or more, by weight, of platinum should be treated as a platinum alloy.
Importers exploit the notification by declaring the shipment as platinum rods which include 4% platinum and 96% gold, thus ending up paying a 10.75% duty, the president of a jewelry retailer says based in South India, who did not want to be named.
The importers are not at fault as the law allows them to import platinum alloy bars containing only 2% platinum and the rest gold, IBJA National Secretary Surendra Mehta told ET.
The duty was the same on gold and platinum until two months ago, when the levy on gold was increased to 15% but that on platinum was maintained at 10.75%.
