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Govt tightens norms for gold jewellery exporters to curb misuse

Govt has already banned exports of gold jewellery above 22 carats

Rajesh Bhayani  |  Mumbai 

gold, commodity

The Union government is considering more measures to stop malpractices in of jewellery, said two people familiar with the development. On Wednesday, the Noida Export Promotion Zone customs collector issued a trade notice asking gem and exporters not to directly import on a loan basis.

Commerce ministry and development commissioners of special economic zones (SEZs) are also working to make improvements on the export front, while discouraging malpractices on the part of the exporters, informed knowledgeable sources.

They will now have to take on loan only from nominated agencies and banks. units are usually allowed to import freely but so far, as importing on loan is concerned, it's a banking transaction where interest is paid and hence, "banking transactions for like taking on loan shall be done in India and hence direct import of on loan is disallowed," said Rahul Gupta, chairman of Export Promotion Council for EOUs and SEZs (EPCES).

Another person familiar with the development said there was a recent meeting wherein the development commissioners of SEZs discussed the problems of and misuse on the part of the exporters.  

However, the group is also said to be reviewing facilities of sending outside areas to domestic units. However, there are instances of misuse of work facilities. After being sent, there were questions being raised about the nature of the being received. There were doubts if the came back after the processing and designing stages were completed, or was it something entirely different that was being sent in their place.


Some cases of misuse at work facilities were also found by the exporting units.

The government is currently reviewing such facilities. Sources say action against such units may be taken if a case of serious misuse comes to light.

Govt tightens norms for gold jewellery exporters to curb misuse

Apart from this, since last few quarters, there has been a sharp fall in from following the imposition of a duty charge on the import of from the The government is also considering ways to incentivise such

Around 10 days ago, the government banned of above 22 carats. This was done to stop low-value addition or round tripping. Round tripping is making imports and re-exporting them without major changes.

Round tripping has been a major menace in the area of According to the Thomson Reuters GFMS Survey report for first half of 2017, round tripping volumes recorded a sharp rise for the period with estimates pegging such to stand at 89 tonnes in the first half of 2017, up from 53 tonnes in the same period last year. "We understand the increase was primarily related to bringing forward as the cost of round tripping post-was expected to increase," stated the report.

On Wednesday, the Director General of Foreign Trade (DGFT) also liberalised norms for status holders who were entitled to export free-of-cost items for promotion subject to an annual limit of Rs10 lakh or 2 per cent of the average annual export realisations during the preceding three licensing years, or whichever is lower. This limit has been significantly increased for other sectors but the export sector has been kept out of the ambit of liberalisation, said the DGFT in a public notice issued on Wednesday.

 

First Published: Sat, August 26 2017. 01:56 IST
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