GST officials conducted surveys on the official premises of four bullion dealers in south Mumbai’s Zaveri Bazaar gold market. The officials suspect likely GST evasion and improper availment of input credit, according to a source aware of the development. “There is a survey going on to ascertain whether the companies in question were GST compliant,” he said. The surveys, trade sources said, began early Thursday noon and were underway till the time of going to press. Gold attracts an import duty of 10 per cent and GST of 3 per cent. India consumes around 800 tonnes of gold annually in the form of jewellery, bullion and coins.
Since the government raised the duty in stages from 2 per cent to 10 per cent in 2013, the metal began to be smuggled into the country. Trade sources estimate that 120-200 tonnes of the 800 tonnes consumed annually are smuggled. Those with ill-gotten wealth are suspected buyers of such gold, which is cheaper than officially imported metal. Bullion dealers typically tend to have large turnovers but work on thin margins. Some of them import gold under advance licence for export purposes only, it is learnt. In addition to bullion, some also manufacture and sell coins. Big bullion merchants and many jewellers are registered dealers under GST.