A diplomat coming to India to attend the wedding of a friend’s daughter was stopped by the customs department at Delhi’s Indira Gandhi International Airport (IGIA) recently. The gemstone beads she was carrying to wear at the wedding was way beyond the allowed limit.

The cap on carrying gold onboard was recently increased but it is still too less and passengers wearing jewellery are often asked to pay duty. Last year, as many as 20 passengers were stopped and fined. A few were even arrested for carrying gold crystal beads wholesale without declaring it.

“The limit for carrying gold for female passengers has been increased from R20,000 to R1 lakh and for male passengers from R10,000 to R50,000. A female passenger cannot carry more than 35 gms of gold, which is still very less,” a customs department official said.

A source requesting anonymity claimed that if the customs department remains strict, at least 50 passengers would be caught with excess gold jewellery every day.   

“The non-resident Indians (NRIs) suffer the most as they often carry jewellery to attend weddings. Though it is not smuggling, but we have to stop them as per rule,” the official added. Officials said such passengers can also be arrested for green channel violation as they cross the customs check without declaring the gold.

There is a duty of 10% on gold jewellery and 6% on gold biscuits. Sources said that the rule is applicable only to those NRIs who are living abroad for more than a year. “Otherwise, one cannot carry even 1gm of gold. If someone is going on a trip, he must mention the jewellery in the departure slip and get an export certificate from the customs, which he/she can show while coming back to India. If a passenger does not fill in the departure slip, he/she will be in trouble while coming back,” the official said.

If the NRIs are not willing to pay duty, they can keep the gold at the customs warehouse and take it back on their return flight.

Investors are concerned over certain commodity schemes such as gold where they put in an amount of money for an agreed quantity of the said product inclusive of its delivery, said Habib Jewels Sdn Bhd managing director Datuk Meer Sadik Habib.

He said there was no big concern on product authenticity but noted that there was a tendency now for people to patronise more well-known jewellery stores following the increase in the monitoring of such schemes by the authorities.

“I think the product authenticity is not really the big issue, but I think the way these (investment) schemes are being done in such a way that some people have complained that payment is made but the products are delivered later on.

“So, during the interim period should they be shut down, they will not be able to deliver the goods. Other things such as the promises (being made) by them and if they are shut down, then you cannot fulfill the promises. Even the guarantee to buy back (may not happen) as the company has to be there,” he added.

Meer added that there had been an increase in the number of people who sought gold and other precious metals such as diamonds from jewellers, notably the more reputable ones of late due to these issues.

“A number of people have realised the good old way of buying (physically) and selling thereafter should the price go up or when they need cash. Secondly, some of these people want to adorn themselves with jewelleries as well,” he explained.

At the launch of the company's Diamond Fest 2013 here yesterday, Meer, who had inherited the business from his father Datuk Habib Mohamed Abdul Latif, also ruled out a possible re-listing of Habib Jewels in the near future.

“We really need to see whether there is a need for the funds or not. But we don't need the funds (now) as we just grow the company organically,” he said.

The company has 30 retail outlets throughout the country and may expand to include more “out of town areas” this year.