- Dhanteras sees increased gold purchases due to its auspicious significance in India
- Gold is cheaper in Dubai as UAE imposes no import duties or heavy domestic taxes
- Duty-free gold import limits to India are 40g for women and 20g for men or eligible travelers
As Dhanteras approaches, a favourite conversation among Indian households remains the purchase of gold. It is considered an auspicious affair to buy gold Dhanteras as it is seen as a mark of wealth and prosperity.
With gold turning significantly expensive, people seek offers, discounts and alternative approaches to buying gold as well. As a result, some look towards getting gold from countries like Dubai, where the yellow metal is more attractive due to lack of taxes.
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Gold is cheaper in Dubai mainly because the UAE does not charge import duties or heavy domestic sales taxes on gold bullion and jewellery. When people buy gold in Dubai, they can avoid taxes like VAT if they use the tourist refund scheme. On top of that, when bringing it into India, customs duty can be avoided if the gold is under the permitted weight limit.
Till What Value Is Dubai Gold Attractive?
Indian residents or tourists of Indian origin who have lived abroad for more than one year can bring a limited amount of gold jewellery to India without paying customs duty. Women can bring up to 40 grams, while men and other eligible passengers can bring up to 20 grams.
The allowance is based on weight. It covers jewellery made of gold, silver, platinum and other precious metals, with or without stones. However, gold bars, coins, biscuits and bullion are not allowed under this duty-free jewellery benefit.
Example:
Particulars | Dubai | India |
Gold purity | 22K | 22K |
Price per gram | Rs 11,435 (Nov. 3) | Rs 12,800 (Nov. 3) |
Quantity | 50g | 50g |
Gold value | Rs 5,71,759 | Rs 6,40,000 |
What If Duty-Free Limit Is Breached?
Assuming full VAT refund and 15% passenger gold-import duty on excess value:
- Gold value (50g): Rs 5,71,759
- Duty-free gold (40g for women): Rs 4,57,407.20
- Dutiable gold (10g): Rs 1,14,351.80
- BCD (10%): Rs 11,435.18
- AIDC (5%): Rs 5,717.59
- IGST (3%): Rs 3,430.55
- Final value after customs: Rs 5,92,342
Here, making charges on gold jewellery have not been accounted for, which can inflate the final value as GST is applicable on it. The illustration also does not account for aspects like forex fees or exchange rate.
Purchase Cost In India:
- India charges 3% GST on gold value + making charges.
- Gold value: Rs 6,40,000
- 10% making: Rs 64,000
- Subtotal: Rs 7,04,000
- GST (3%): Rs 21,120
- Total India cost: Rs 7,25,120
This shows that Dubai gold can be significantly cheaper than Indian gold if you understand the permitted duty-free limits, how customs duty works, and how to claim the UAE VAT refund. Customers should note that customs duty keeps changing periodically, so it is best to check the updated rules before finalising any financial commitment.
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