Ranya Rao case: A special court has rejected actor Ranya Rao's bail plea after she was apprehended for purportedly smuggling more than 14 kilograms of gold on a flight from Dubai to Bengaluru earlier this month. Tarun Raju, the second individual implicated in the case, has been remanded to judicial custody for a period of 15 days.
The Directorate of Revenue Intelligence (DRI) officials have referred to it as one of the largest gold seizures at the Bengaluru airport in recent history. The recent confiscation of 14.6 kgs of gold by DRI once again underscored the issue of gold smuggling and its gravity.
The DRI is currently investigating whether this incident stands alone or is part of a wider trend of gold smuggling, particularly given Rao's frequent trips to Dubai. This case has also sparked inquiries into potential police complicity, as local officers were known to drop Rao off at home following her return from Dubai.
What laws on gold smuggling in India say
Every year, the Directorate of Revenue Intelligence (DRI) and other enforcement agencies confiscate an average of over 3 tonnes of smuggled gold entering the country. According to the DRI, approximately 55% of these seizures occur via the land route, while 36% come through the air route.
> Prior to its removal in 1990, the Gold (Control) Act, 1968 imposed restrictions on gold imports and the possession, acquisition, and disposal of gold in India. Following economic liberalisation in the 1990s, the government adjusted its policies and implemented an import duty of Rs 250 for every 10 grams of gold, resulting in a significant increase in gold imports in subsequent years.
> Currently, regulations governing gold imports in India fall under the Customs Act, 1962, overseen by the Central Board of Indirect Taxes and Customs (CBIC). The customs duty on gold varies based on the quantity carried by an individual and the duration spent abroad before returning to India, in accordance with the Baggage Rules, 2016 (outlined under the Customs Act).
> According to these regulations, an individual residing outside of the country for more than a year is permitted to bring up to 20 grams of jewelry duty-free with a value limit of Rs 50,000 for men, and up to 40 grams with a limit of Rs 1 lakh for women.
The Central Board of Indirect Taxes and Customs (CBIC) has established specific guidelines for Indian passengers returning from Dubai after residing there for more than six months. They are allowed to bring up to 1 kg of gold, provided that the relevant customs duty is paid.
The customs duty rates for gold are as follows:
> 3% customs duty applies to individuals carrying 20-50 grams of gold for men and 40-100 grams for women.
> 6% customs duty applies to individuals carrying 50-100 grams of gold for men and 100-200 grams for women.
> 10% customs duty applies to individuals carrying over 100 grams of gold for men and over 200 grams for women.
In 2003, the Supreme Court ruled that any imported article not meeting the applicable conditions or restrictions must be classified as a "prohibited good". Such goods can be confiscated under Section 111 and subject to penalties under Section 112 of the Customs Act, which may include a fine equal to the value of the goods. Section 135 stipulates a penalty of up to 7 years in prison if the smuggled goods exceed Rs. 1 lakh in market value.
Smuggling under Bharatiya Nyaya Sanhita
Smuggling is also punishable under Section 111 (Organised Crime) of the Bharatiya Nyaya Sanhita, 2023, which penalizes "trafficking in illicit goods" with a minimum of five years imprisonment, extendable to life imprisonment. Under the UAPA, smuggling is punishable as a "terrorist act" under Section 15 if it results in "damage to the monetary stability of India", carrying the same penalties as listed above.
Gold duty
In the 2023-24 budget, the duty rate on gold for passengers returning after staying beyond 6 months has been reduced to 6%. A limit of 1 kg of gold has been set for this category, while a rate of 36% applies to all other cases. The price difference of gold between Dubai and India, along with the 6% or 36% duty, still makes smuggling a lucrative option for both smugglers and duty-paying passengers. It is estimated that a profit of up to Rs 4 lakhs can be earned on 1 kg of smuggled gold.