Gold seizures in poll-bound states rattle industry

livemint.com:

MUMBAI : India’s gold trade is staring at a potential loss of ₹6,000 crore this festival season as authorities clamp down on transport of the precious metal in poll-bound states, an industry official said. Law enforcement agencies have seized gold consignments in Madhya Pradesh, Telangana, Rajasthan and Chhattisgarh, major consuming centres of gold where the model code of conduct is in place.

Police and other agencies have been seizing intrastate and interstate consignments despite their being backed by the relevant documentation, according to Surendra Mehta, national secretary of nodal trade body India Bullion And Jewellers Association (IBJA), whose gold rates are used by the Reserve Bank of India (RBI) to price sovereign gold bonds issued on behalf of the government. Mehta has written to election commissioners in the respective states to lift the blockade on the goods backed by proper documentation.

Mint has seen a copy of the letter from IBJA to Madhukar Gupta, state election commissioner, Rajasthan. “...it has come to our notice that bullion and jewellery moving in this state, whether intrastate or interstate, is being seized by the police department and other agencies citing election code of conduct in the movement of jewellery.

Such bullion and gold jewellery are being seized in spite of the fact that movement of these goods is with all relevant documents under applicable GST (goods and services tax) laws (sic)," read the letter signed by Mehta. “With the ongoing festival season and wedding season ahead, the performance of our sector will be badly affected, including loss of work to goldsmiths who are the backbone of our industry and also recognised as a key contributor to our GDP (gross domestic product)." Mehta