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DGFT relaxes gold supply norm

Source : BUSINESS_STANDARD
Last Updated: Sat, Sep 07, 2013 19:02 hrs
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In a major relief for jewellery exporters, the Directorate General of Foreign Trade (DGFT) has done away with the requirement of inward remittance certificates for supply of gold. In a notification dated September 6, the DGFT said that import of gold under advance authorisation (AA) or duty free import authorisation (DFIA) would not necessarily be followed by exports but each import has to be accounted for.

By doing so, the DGFT has provided a relaxation in the Reserve Bank of India (RBI) regulations announced on August 14, which necessitated the submission of proof of foreign remittances of exports of jewellery made out of the first consignment of gold supply. According to RBI regulations, exporters can take delivery of gold as first and second consignments smoothly. But, for the third consignment, the exporter has to submit the proof of foreign remittance -- something the industry has objected to.


"The foreign remittance comes generally in 90 days and occasionally in 180 days. Hence, till that time jewellers will have to shut down their units which will have a cascading effect on exports. Therefore, the DGFT accepted our recommendation to consider the Customs-attested invoice as proof of foreign remittance," said Pankaj Parekh, vice-chairman of the Gems & Jewellery Export Promotion Council (GJEPC).

The Customs department in its notification dated September 4 had asked exporters to take permission from it and submit details of overseas importers and then execute orders. But, the department contradicted this in a subsequent paragraph by saying that exports could be executed only to Customs-enrolled members. This means exporters can ship ornaments only to those overseas importers whose know-your-customer (KYC) details have been submitted with the Customs department.

"We have urged the DGFT to clarify on that as the clause continues to create hurdles for gold supply," said Parekh.

Meanwhile, the GJEPC has created many new categories for accommodating new entrepreneurs and growing small players at its forthcoming 40th annual awards set to be organised in association with Dun & Bradstreet this month. "Unlike previous occasions, we have decided to recognise small but rapidly growing players this time," said Colin Shah, managing director of Kama Schachter Jewellery and convener of the award committee.

According to GJEPC chairman Vipul Shah, jewellery exports this year may go up by seven-eight per cent, a decline from the earlier estimate of 12-15 per cent growth due to an unfavourable global economic outlook. Overall, gems and jewellery exports grew 3.18 per cent in rupee terms to Rs 2,12,639 crore in 2012-13 as compared to Rs 2,06,080 crore in the previous year.

In dollar terms, however, total jewellery exports declined 9.42 per cent to $39,033 million in 2012-13 from $43,094 million in the previous year.

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