2014, the India Bullion and Jewellers Association (IBJA) had written to the then Raghuram Rajan, accusing the UPA government
2. of “deliberately yielding to the cronies” allowing repeat tax offenders or shell companies to import gold under the RBI’s 80:20 scheme.
3 it appears companies that were given star trading house and premium trading house (PTH) licenses could have earned up to Rs 10,500 crore
4. By by selling the yellow metal at a premium in the domestic market.
5 The UPA government and RBI had selected 13 companies at the time and allowed them to import gold in its effort to restrict imports
6 Under the scheme, companies were allowed to sell 80% of their imports in the domestic market, while the remaining 20 %had to be exported.
7. It was only after that they could order for a new consignment.
8 industry body has alleged the UPA government and RBI selected these companies without any background check
9. they were given the star trading house (STH) and premium trading house (PTH) tags.
10 Rajesh Exports had imported 40,791 kg (between June-November 2013) of gold
11. As per CAG increased to 68,500 kg (June-November 2014) following the implementation of the 80:20 scheme.
12 Mumbai-based Riddhi Siddhi Bullion, which was termed “repeat offenders” by DRI, IT and ED was given the license of a star trading house
13 The MD of Riddhi Siddhi Bullion was the nephew was arrested by the Enforcement Directorate in one of the biggest hawala scandals.
14 Kanak Exports was also under the scanner of tax authorities in early 2000 and did not import any gold between June and November 2013.
15. However, after it was granted the star trading house license, it imported 24,896 kg.
16 Mehul Choksi-promoted Gitanjali Gems subsidiary Diamond India Limited imported 700-kilogram gold despite it not being entitled to do so
17 Diamond India Ltd had not supplied any gold to exporters in 2010‐11 to 2012‐13 thus it was not entitled to import gold under 20:80 scheme
18 DGFT,granted permission to DIL to import 100 kg gold bars,at Mumbai, Ahmedabad, Chennai, Hyderabad, Delhi, Kolkata, Bangalore and Kochi
19 Gopal Jewel had only Rs 35 lakh in paid-up capital, with 2 directors But managed to import a whopping 1,728 kg of gold under 80:20 scheme
20. At that time gold was selling at a premium rate, which was around 10 to 15 percent higher than actual prices
21 The total import value of gold was approximately Rs 1 lakh crore as per CAG report.
22. So you can easily calculate 10% of total amount was pocketed by these companies, just by selling the imports in the domestic market.”
23 Moreover, these companies exported lower quality gold than what they had imported & sold remaining in domestic market at higher prices.”
24 Exports were also made to related parties. Some of the remittances were being received the very next day.
25 These importers importing high quantities of gold by repeated exports at short intervals, to maximise their domestic sale 20:80 scheme.
26 export obligation mostly met by exporting machine made plain jewellery viz. bangles and chains remelted again for gold bars for import
27 average monthly export of plain gold jewellery increased 3.5 times after relaxation was brought under the 20:80 scheme.
28. However the export of plain gold jewellery had actually surged by more than 10 times after the relaxation.”
