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What are the legally permissible limits and tax implications when bringing gold from Dubai to India?
India, with its rich history of gold, views the precious metal as a cornerstone of financial security. According to the World Gold Council, the demand for gold in the Indian jewellery market soared during the second quarter of 2023.
Dubai, renowned for its vibrant gold souks, sets its gold prices based on international standards, ensuring consistent pricing across all outlets. With prices fluctuating, gold buyers in Dubai often capitalise on downward trends, securing gold at favourable rates.
The UAE government initially introduced a five per cent Value Added Tax (VAT) on gold and other precious metals. However, due to decreased demand and a significant drop in gold, platinum and silver sales, the tax implementation was rolled back.
This article seeks to cover all the frequently asked questions (FAQs) about bringing gold from Dubai to India.
Is Gold Cheaper in Dubai than in India?
One of the reasons Indians visit Dubai to buy gold is the significant price difference compared to India. Gold has traditionally been pricier in India due to factors like import charges and taxes. However, recent trends have seen a narrowing gap between gold prices in Dubai and India.
Despite this, Dubai typically offers lower gold prices than most Indian locations. The absence of Goods and Services Tax (GST) on gold in Dubai keeps prices more competitive compared to India, where a three per cent GST is applied to gold jewellery and bullion. Additionally, lower manufacturing costs at Dubai jewellery stores contribute to the price advantage. On average, 24K gold in Dubai is 5-7 per cent cheaper than in major Indian cities.
What are the Customs Duty Charges on Gold?
Customs duty charges on gold are import taxes imposed by the Indian government on gold brought into the country by individuals. These charges play a crucial role in regulating and monitoring the entry of this valuable metal into the nation.
When bringing gold into India, it's essential to understand the customs tax rates set by the Central Board of Indirect Taxes and Customs (CBIC). These rates vary based on the duration of stay abroad for Indian passport holders and individuals of Indian descent.
How much Gold is Allowed from Dubai to India?
Male travellers are permitted to carry up to 20 grammes of gold (with a maximum value of INR50,000), while female travellers can carry up to 40 grammes (with a maximum value of INR100,000). Exceeding these limits necessitates payment of customs duty on gold.
How is Custom Duty on Gold Applied in India?
The calculation of customs duty on gold imported into India varies based on the type and quantity of gold items. The process typically involves estimating the gold's value, applying the relevant duty rate and adding taxes on the duty amount.
Gold items such as bars, coins and jewellery are valued based on current global gold prices for 24K purity on the day of import. Customs duty rates range from 0-10 per cent based on the assessed value of the gold item.
Custom Duty Charges on Gold Bars
Gold bars weighing less than One kilogramme per passenger are subject to a 10 per cent customs charge. Gold bars weighing less than 20 grammes incur no customs duty, while those weighing 20-100 grammes are charged a three per cent customs fee.
Custom Duty Charges on Other Forms (Coins, Ornaments)
Gold coins weighing less than 100 grammes per passenger have a 10 per cent customs charge, with no duty for coins weighing less than 20 grammes. A 10 per cent customs charge is also applied to gold jewellery and ornaments exceeding 20 grammes and valued over INR50,000.
Who Sets the Limit on the Amount of Gold that can be Brought from Dubai to India?
The limits on the amount of gold that can be brought from Dubai to India are set by the Indian government, specifically the Directorate General of Foreign Trade (DGFT) and the Customs Department. These limits may be subject to change, so it’s advisable to check with the relevant authorities or official sources for the most up-to-date information.
Are Children Levied a Tax for Gold Jewellery in India?
No, children under 15 years have higher limits of up to 40 grammes attracting no duty, and up to 200 grammes attracting only 3-10 per cent duty based on quantity.
Additional Details
The Indian Central Board of Indirect Taxes and Customs imposes restrictions on gold imports from Dubai to India. Tourists are drawn to Dubai's gold market for its quality and competitive prices, notably at the Deira Gold Souk. Over time, India has implemented stringent customs duties affecting gold imports from Dubai and other UAE cities.
Essential Things to Know About Carrying Gold from Dubai to India
Compared to India, Dubai offers lower gold prices, but travellers must be mindful of regulations when bringing gold back home:
In conclusion, it is important to understand the permissible limits and tax implications when bringing gold from Dubai to India. With this knowledge, travellers can plan their purchases and enjoy the festivities with newfound treasures from Dubai's gold market.
(The writer is a legal associate at NYK Law Firm, one of the top legal consultants in Dubai)
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