The truth surfaced when police on early Tuesday morning confiscated nine kilograms of gold from a container en-route to Kathmandu from Tatopani at Dhulikhel check post in Kavre.[break]
The police came across the illicit transport when it inspected the container, numbered Ba 2 Kha 2825. “The driver Sete Tamang of Tatopani-4 Sipa has been taken under control along with the container for investigation,” Kavre SP Geeta Upreti informed Republica.
The import was illicit because the government has presently allowed only the commercial banks to import the yellow metal. Given that gold was priced at Rs 51,355 per ten grams in the local market on Tuesday, the illicit consignment is valued at Rs 46.21 million.
Furthermore, as the government charges customs duty worth Rs 2,300 per ten grams of yellow metal, it inflicted a revenue loss of Rs 2.07 million to the national treasury as well.
“Clearly, the attempt by the illicit importer, who is still to be known (as the driver is a mere transporter), not only inflicted loss of over two million rupee in customs duty, but also flouted law on control of unauthorized trade,” said a customs official, requesting not to be named.
He failed clarify how the consignment could have entered the country without the notice of security personnel that heavily man Nepal-China border and customs officials.
Meanwhile, gold dealers commented that what came to notice on Wednesday was just a tip of the iceberg which they have been repeatedly pinpointing to the government.
“Smuggling is bound to happen when you create a huge deficit in the market,” said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers Association.
During the festive and wedding season, Negosida has been citing the daily demand to have soared to as much as 45 kgs a day, and pushing the central bank to at least double the supply quota. However, the central bank continues to limit the quota to 15 kgs.
“The mismatch of 30 kgs is a huge gap, and the incentive of illicit trade -- which allows revenue evaders to enjoy an earning of Rs 2,300 every 10 grams -- is surely attractive,” said Shakya, adding that Negosida had repeatedly informed about such risks to Nepal Rastra Bank (NRB), Customs Department and the Ministry of Finance seven months ago.
Negosida officials have also been informing Republica of growing smuggling of gold from China during marriage and festive seasons, when demand far exceeds the official supply.
“Sadly, however, instead of keeping a close watch, concerned officials always thought it was our ploy to get the quota raised,” said Shakya.
With demand starting to drop of late with wedding season already over the half way mark, dealers said scarcity of gold will subside in the market in the next two weeks. However, they cautioned that might still not deter the illicit traders because people involved in unauthorized trade along the porous Nepal-India border are of late using gold to pay for their transactions.
“With NRB tightening its hold on the supply of Indian currency (IC), illicit traders are facing difficulty in getting hold of IC even while offering a premium rate of Rs 168 per IRs 100, which is Rs 8 higher than its official exchange rate. Hence, we have been informed, they are using gold to settle their unauthorized trade accounts in recent period,” said Shakya.
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