The department of revenue (DoR), ministry of finance has clarified that any purchase of gold, silver, jewellery, or precious gems and stones below Rs 2 lakh does not require permanent account number (PAN) or Aadhaar of a customer as mandatory Know Your Customer (KYC) document.
Sources said that the notification issued under PML Act, 2002, on December 28, 2020, is a requirement of FATF Dealers in Precious Metals and Precious Stones (DPMS) to carry out KYC and customer due diligence only when they conduct cash transactions above Rs 10 lakh.
“This is a requirement of FATF (Financial Action Task Force) - the global money laundering and terrorist financing overseer which as the inter-governmental body sets international standards aimed to prevent illegal activities on terror funding and money laundering,” they added.
According to sources, one of the recommendations requires the DPMS sector to fulfil obligations of customer due diligence (CDD) when they conduct cash transactions above a certain limit ($/Euro 15,000). India is a member of FATF since 2010.