The government has prohibited individuals from importing gold and silver bars, cracking down on growing trend of traders making inbound passengers carriers of the precious metals. The new rule will come into force from July 16.

Presently, a person visiting abroad can import gold bar or ornaments weighing up to 50gm and silver bars weighing up to 500gm by paying customs duty. The existing provision also allows person who had resided in a foreign land for more than six months to import 500gm of gold bars or ornaments and a kilo of silver.

After the new rules come into effect, individuals will only be allowed to bring gold ornaments weighing up to 50gm and silver ornaments up to 500 gm.

Sishir Kumar Dhungana, director general of the Customs Department, said the government enforced the new rule amid reports traders were making inbound passengers carriers of gold by paying them a certain commission. “Even if it is ornament, the government will seize anything above the prescribed limit,” he said. He said the new provision is expected to discourage traders using individuals—especially those coming from Dubai and Hong Kong—as gold carriers.

Introducing a guideline on December 27, 2010, the government allowed commercial banks to import 15kg of gold daily to curb rising gold import bills. Sixteen commercial banks have been allowed to import gold. Dhungana said the banks are now allowed to import up to 600kg of gold a month.

According to him, gold import has dropped to mere 100-200 kg per month in the last two months. “Based on the fact that there is no shortage of gold in the market despite a fall in the imports through the banking channel, the government suspects gold smuggling has been thriving,” he said. Even gold traders are reluctant to purchase gold imported by commercial banks.

Three years ago, the government had permitted an individual to import gold bars weighing up to 10gm. The quota was later raised to 50gm.

The new provision has waived customs duty on gold and silver ornaments. The duty has also been waived for individuals importing ornaments with precious stones that cost up to Rs100,000.