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Before the NDA government scrapped the 80:20 gold scheme, initiated when P Chidambaram was finance minister, the Directorate of Revenue Intelligence (DRI) had informed the Modi government that the export obligations were mostly met by exporting costly machine made jewelry, such as bangles and chains, which were re-melted in Dubai and cast into primary bars for re-import.The DRI report, according to sources, also said “exports are generally related to front/shell companies in UAE, Hong Kong and Singapore.The practice began after the UPA regime introduced the 80:20 gold scheme and later relaxed it to allow the Star Trading Houses and Premier Trading Houses (STH/PTHs) to import gold, the DRI report said.The DRI report also said “since the actual purpose is to use export as a cover for import” by making machine-made plain chains and bangles, “they are keeping the cost of export as low as possible”. It further said that another reason for exporting plain jewellery and not studded ones was because “Dubai has a custom duty of 0.325% and Sharjah a duty of 0.18% on studded gold jewellery.”This DRI study of the 80:20 scheme has now reached a sub-committee of the Public Accounts Committee of Parliament, after the latter sought it from the concerned government department, sources privy to the development said. The sub-committee headed by BJP MP Nishikant Dubey is scrutinising the scheme in the wake of the Nirav Modi-Mehul Choksi-PNB fraud case.The DRI report was based on the scrutiny it carried out after the finance ministry directed it to closely study the working of the 80:20 scheme between August and September 2014. Chidambaram had relaxed the scheme to introduce STM/PTMs in mid-May 2014.The comparative data of exports DRI studied showed that the quantity of gold export surged to 20,166.89 kg (worth Rs 4,799.80 crore) between January and July 2014, compared to 6,063.92 kg (worth Rs 1,599.45 crore between January and July, 2013, and 1,508.56 kg (worth Rs 404.93 crore) during January and July, 2012.“It is seen from above data that exports of plain gold jewelry in terms of quantity has in 2014 grown at an astronomically high rate of 1236%, compared to the same period during 2012…The data also reveals that the export of plain gold bangles and chains formed a significant part of the exports in 2014. Another aspect noticed in the course of analysis is that substantial exports has been by such exporters who till recently had either no exports or negligible exports,” the DRI report said.