Delhi HC Calls CBIC to reassess the Gold Limits under Baggage Rules

Sub: Eco

Sec: External sector

Why in the News?

The Delhi High Court has asked the Central Board of Indirect Taxes and Customs (CBIC) to revisit the permissible limits for carrying gold under the Baggage Rules, 2016, citing that current limits are inconsistent with the prevailing market rates of gold.

Context

The case revolves around the confiscation of gold jewellery from travellers under existing baggage rules, which have not been updated to reflect the current market value of gold.
The High Court also highlighted the need for a balanced approach to prevent harassment of genuine travellers while effectively curbing gold smuggling.

Key Points

Governed by the Baggage Rules, 2016, under Section 79 of the Customs Act, 1962.
Baggage Rules, 2016:
- Came into force on April 1, 2016.
- Classifies gold beyond permissible limits as a prohibited article.
At present, Jewellery Limits:
- 20 grams (₹50,000 cap) for men.
- 40 grams (₹1,00,000 cap) for women.
Conditions:
- Applicable to passengers who have resided abroad for over 1 year.
- Jewellery exceeding the prescribed limit must be declared and duty paid.

Limits are outdated:
- The market rate of gold has increased significantly, making the ₹1,00,000 cap for 40 grams insufficient.
Frequent seizures of small quantities:
- Passengers walking through the green channel with minor jewellery face seizures and penalties.
Lack of clarity for travellers:
- The Declaration Form and Baggage Rules do not clearly inform travellers about the need to declare jewellery exceeding prescribed limits.

Concerns of gold smuggling:
- Frequent travellers, often on short trips, are suspected of smuggling gold into India.
Genuine cases ignored:
- Tourists and OCI/PIO cardholders attending social events, like weddings, often carry gold exceeding permissible limits.
- Expecting them to file declarations makes the process cumbersome and traveller-unfriendly.