A month ago, the police arrested a Mumbai-based gold trader at a lodge and recovered 263 gold rings. The police drew the attention of the octroi department towards the tax evasion. The Ahmednagar Municipal Council issued a letter to the Jewellers' Association and invited it for talks to prevent evasion of octroi. However, the octroi department evoked no response from the jewellers.

During the marriage and festival seasons, traders or their agents visit the town every three or four days. During off-season, they visit at least after a fortnight.

Most gold traders follow a similar modus operandi. They arrive by private luxury buses early in the morning and stay at lodges near the jewellery bazaar. They carry ordinary bags not to arouse anyone's suspicion. The trader arrested last month had gold rings hidden in ordinary papers. The traders contact regular sources to make deals. Usually, the price is lower than the market rate. The buyer is also offered a credit for a month or more. The gold transactions here have gone up. According to the police, in such kinds of business, it is often the stolen gold that is transacted.

No formal records are maintained by either party. The whole business rests on mutual trust. In the absence of absence of coordination between government agencies, nothing happens even when an incident comes to light. The police too do not go into the details.

Octroi officials say it is impossible to inspect all luxury buses. It would invite the wrath of passengers. Often, the traders alight from the bus before the bus reaches the octroi check post, hire autoricksahaws or board the car following the bus to reach the main part of the city.

After relaxation of gold import rules, excise and customs authorities have been conniving at these transactions, the sources say. During inspection, sales tax and income tax authorities collect due taxes but other agencies are kept in dark about tax evasion.