BackHC seeks centre, RBI’s replies on plea against easing gold import curbs
HC seeks responses on plea challenging govt circular allowing select trading houses to procure gold for export, domestic market
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New Delhi: The Delhi high court on Thursday sought responses of the centre and the Reserve Bank of India (RBI) on a plea challenging a government circular permitting select trading houses to procure gold for export as well as for the domestic market.
Justice Vibhu Bakhru sought replies from the ministry of commerce and the RBI by 23 September on the plea of Delhi Bullion Jewellers Welfare Association which has contended the circular was passed without following due procedure and is not a policy decision.
The petitioner organization has contended the 21 May 2014 circular was issued in an “arbitrary manner" by the previous government and that too right after the Lok Sabha election results were announced. The association has said that by allowing star trading houses and premium trading houses (STH/PTH) to import gold under the 20:80 scheme, “these entities will end up controlling the gold market".
The RBI had in July last year imposed restrictions on gold imports in order to check a burgeoning current account deficit and sliding rupee. The central bank had tied imports with exports and prescribed a 20:80 formula. This facility was available to select banks and other entities were barred from importing the gold.
Under the 20:80 scheme an importer has to ensure that at least one-fifth, or 20%, of every lot of imported gold is exclusively made available for exports and the balance for domestic use.
The decision to ease the restriction follows representations from jewellers, bullion dealers, banks, and trade bodies. The eligible STH and PTH, however, will have to follow certain conditions.
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