F.No.711/164/93-CUS(AS) DATE 08/08/2005
Guidelines for the sale of seized/ confiscated gold - Reg.In view of the difficulties being encountered in the disposal of seized/confiscated gold, the procedure prescribed vide Ministry’s letter of even number dt. 9.03.2001 has been reviewed by the Government. The procedure for disposal by sale of seized/confiscated gold (other than gold ornaments/jewellery which is to be disposed of as before) shall be as follows:
i) The sale of seized/confiscated gold found ripe for disposal shall be routed through State Bank of India (Bank) who will act essentially as consignee agents. Gold considered ripe for disposal shall be delivered by the concerned Customs House to the Bank at the major centre(s), viz. Mumbai, New Delhi, Calcutta, Chennai, Ahmedabad, Jaipur,Cochin, Bangalore and Shillong for sale in the open market.
ii) Such gold shall, as far as possible, be in an easily marketable form such as TT bars, 1kg bars, 500/100gms bars etc. Crude gold/ jewellery will be converted by the Customs Department to .999/.995 purity before delivery to the Bank for sale.
iii) The sale price of gold irrespective of the form of gold (whether TT bars 0.999 or Kg. bars 0.995 purity) will be based on the closing market price of the previous day, as reported in the local editions of the three national Economic daily newspapers. Sales tax/Octroi etc. will be extra and chargeable to the buyer.
iv) The pricing of gold will be worked out by the Bank taking due note of the methodology as per enclosed Annexure-I. The Customs Department will accept the price worked out by the Bank on this basis.
v) No commission will be levied by the Bank on the Customs Department. However, all out of pocket expenses incurred by the Bank would be deductible (@ 1% of the market price).
vi) The Bank will arrange for payment of taxes such as Sales Tax, Octroi etc. out of the sale proceeds of the gold and would submit copies thereof to the concerned Commissioner of Customs along with the advice/ challan for remittance of sale proceeds. The sale proceeds will be deposited immediately after sale of gold into the designated account to be advised by the Commissioner of Customs.
vii) The concerned Commissioner of Customs will provide copies of the Assaying Certificate along with the physical delivery of gold and assume responsibility for the fineness of gold as certified in the Assaying Certificate. In the event of any gold being found counterfeit, the same will be returned to the Commissioner of Customs concerned. The Department will also ensure that the gold is suitably packaged as per practice in the market. The Bank would render necessary assistance to Customs Department.
viii) The Bank will take physical delivery of the gold from the Customs warehouse/ office against a suitable acknowledgment. The control system /mechanism for this purpose will be worked out by the Bank and advised to the Department
ix) The Bank will decide at which centre the gold is to be sold based on various cost / other factors and will also exercise its discretion/ judgment as to (a) when to sell (b) at what price to sell. Although it has to be borne in mind that gold prices can fluctuate significantly even during the course of a single day, the Bank will use its discretion/ market knowledge to get the benefit of the "best" possible price. The concerned Commissioner will, post - sale, make an evaluation as to whether, in view of the range of prices prevailing at the time of sale, the "best" possible sale has been made. The above arrangement will be reviewed as and when necessary through mutual discussion.
x) The Bank will also explore the scope for marketability of coins. The price of such coins will be based on the actual gold content only.
2. Board desires that all Custom Houses should take urgent steps to dispose of seized/confiscated gold as per the guidelines above.
Encl : As above.
Yours faithfully,
Priya V.K. Singh
Deputy Secretary
ANNEXURE-I| 1. | Quantity of gold sold
| ___________gms
|
| 2. | Average market price per 10 grams
(based on the closing market price reported in the three national Economic dailies)
| Rs ___________
|
| 3. | Price of gold at the average market price
(i.e. 1 x 2 )
| Rs ___________
|
| 4. | Sales tax
| Rs ___________
|
| 5. | Octroi, if applicable
| Rs ___________
|
| 6. | Total price of gold
| Rs ___________
|
| 7. | Out of pocket expenses
(@ 1% of (3) above)
| Rs ___________
|
| 8. | Net price payable to Customs
( i.e. (3) - (7) )
| Rs ___________
|
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