By few petty jewellers, Illegal practices have been started because of high import duty on bullion. If they export the entire content of gold, these jewellers get no duty charges. Trade associations of India asking for revaluation of the 10% levy have taken this subject to the finance ministry.
At zero levies the dishonest jewellers buy bullion bars as they seem to export same quantity of gold jewellery. Now they declare the purity as 22 carats while exporting the gold but in reality, it is only 18 carat. They have exported 22 carat and Export bills will prove that. From the buyer who is outside India, they also receive money.
4 carat gold which is cleverly kept and then sold illegally in the local grey market being made into jewellery. Using the illegal hawala way, Payment from this deal is sent to the overseas buyer. As per source, from the jeweller, no duty is charged. After reducing the 2.5¬3% cost of hawala and other important charges, they make a 7% profit.
