CBIC Prescribes New Procedure For Disposal Of Gold

The Central Board of Indirect Taxes and Customs (CBIC) has prescribed the new procedure for the disposal of gold.As per the new rules, the seized/confiscated gold (other than ornaments/jewellery/articles) shall be transferred to the Reserve Bank of India (RBI) through Security Printing and Minting Corporation of India Ltd. (SPMCIL). The implementation of the new procedure was by and large satisfactory, but certain issues were brought to the notice of the CBIC. Firstly, the issue raised was in respect of the determination of the amount of sale proceeds of gold while refunding the amount in lieu of gold already disposed of. There were instances where appellate authorities ordered the return of the gold seized by setting aside the order of confiscation or otherwise. Normally, if the seized gold is disposed of and not available for return, in lieu of such gold, the sale proceeds of gold are refunded to the owner of the gold, after applicable deductions. In these situations, the field formations find it difficult to determine the actual amount of sale proceeds pertaining to the seized gold since they are not getting the details of sale proceeds which are credited centrally in a consolidated manner to the standard gold bars delivered to RBI. The CBIC clarified that at the time of seizure, it may be ensured by the seizing commissionerate/agency that the seizure report has the details of the purity of gold in terms of carat. At the time of handing over gold to SPMCIL in terms of the instruction dated December 03, 2021, the tariff value and the average market price per 10gm (based on the closing market price reported in three national economic dailies) shall be entered in the stock register. Whenever seized gold has to be returned on account of any order from a judicial forum and the gold has already been disposed of, the amount to be refunded in lieu of such gold shall be calculated. Secondly, the issue raised was expanding the scope of the instruction dated December 03, 2021 to include gold jewellery/articles/ornaments. Field formations may intimate SPMCIL only when they have a minimum of 10 kg of gold ripe for handing over. However, in the January-March quarter, irrespective of the quantity, the gold ripe for transfer shall be handed over to SPMCIL at the stipulated deadline. Moreover, it may also be noted that if the gold ready to be handed over to SPMCIL is more than the minimum prescribed quantity, the field formations may inform SPMCIL more than once in a quarter (i.e., if another lot exceeding the minimum quantity accumulates within the same quarter, the formation need not carry it over to the next quarter). Lastly, the issue was in respect of the capacity constraints of the Indian Government Mint at Hyderabad and remapping of zones. The guidelines prescribed in Instruction No. 27/2021 are now applicable to seized or confiscated gold in any form of 24 carat purity, i.e., including gold ornaments, jewellery, or articles of 24 carat purity. The Board has examined the matter in consultation with RBI and SPMCIL. Accordingly, they issued the additional instructions for disposal of gold in terms of Instruction No.27/2021-Customs, dated December 03, 2021. Instruction No. 22/2022-Customs Dated September 06, 2022 Click Here To Read/Download Instruction

CBIC Prescribes New Procedure For Disposal Of Gold

Mariya Paliwala

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