CBIC issues Guidelines for Sale of Seized or Confiscated Gold [Read Circular]

CBIC - Guidelines - Sale - confiscated - gold - taxscan

The Central Board of Indirect Taxes and Customs (CBIC) issued Guidelines for the sale of seized or confiscated gold.

The Board directed to refer to Para 11.2 of Chapter 11 of Disposal Manual 2019 read with Ministry’s letter F. No. 711/164/93-Cus (AS) dated 08.08.2005 and Circular No. 57/2016-Customs dated 01.12.2016 on disposal of seized/confiscated gold and Board’s letter vide F. No. 50711/5/2021-Inv-Customs, dated 22.09.2021. Para 11.2 of Disposal Manual 2019 that relates to disposal of standard/primary form of gold with assayed purity, inter-alia, prescribes that the sale of seized/confiscated gold (other than gold ornaments/jewellery) shall be routed through all public sector banks (approved by RBI to import and sell gold), MMTC Ltd. and STC Ltd. and related procedures for such sale.

With the approval of competent authority, it has now been decided that henceforth seized/confiscated gold will be sold (other than gold ornaments/jewellery/articles) to the Reserve Bank of India (RBI) only. In this regard, the Board has consulted RBI and Security Printing and Minting Corporation of India Limited (SPMCIL) and also signed a tripartite Memorandum of Understanding (MOU) with them. The MOU, inter alia, provides for roles and obligations of CBIC, RBI and SPMCIL regarding collection, transportation and standardization of seized/confiscated gold, delivery of standard gold bars and payment thereon.

The seized/confiscated gold (other than gold ornaments/jewellery/articles) shall be sold to RBI only. Any mention of gold in subsequent paragraphs shall refer to gold other than gold ornaments/jewellery/articles. For this purpose, SPMCIL has been engaged for collection, transportation, conversion into standard gold bars and delivery to RBI. The SPMCIL has facilities to melt gold at India Government Mints (IG Mint) located at Hyderabad, Kolkata and Mumbai. Therefore, Hyderabad, West Bengal (P) and Mumbai (General) Customs Commissionerates have been designated as Focal Customs Commissionerates. Customs Commissionerates have been mapped to one of the three mints on the basis of their location. IG Mints will be carrying out processes such as pre-melting, assaying and weighing in the presence of Customs Officer.

The DoL shall maintain proper account of gold for which an appropriate physical/electronic ledger shall be devised. The ledger shall contain the details of HOGS Notes received from Customs Commissionerates, PW Notes and FW Notes received from focal Customs Commissionerates, Delivery Memo received from RBI and invoice received from SPMCIL. These details should clearly bring out the gold handed over by the Customs Commissionerates, the charges payable to SPMCIL, gold deposited with RBI, amount credited by RBI to CBIC, adjustment in weight required on account of melting and refining and balance quantity of gold carried over to the next cycle by SPMCIL. As mentioned supra, SPMCIL should complete the processes on the gold collected from the Customs Commissionerates within one month of such collection. The Principal Commissioner, DoL shall monitor this time limit. DoL shall also make the payment to SPMCIL upon receipt of the invoice from SPMCIL and delivery cum acknowledgement memo from RBI.

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