Review incentives to gems & jewellery sector to check round-tripping: CAG
THE Comptroller and Auditor General (CAG) on Friday asked the government to review export incentives to gems and jewellery sector to safeguard revenues and prevent round-tripping.
The CAG also asked the Department of Commerce to undertake an outcome analysis of the important schemes implemented to boost the G&J sector from an economic, trading and revenue perspective.
All inverted duty struc- tures, transaction costs, related party transactions, re-export transactions, facilitation measures need to be carefully reviewed before designing an effective promotional scheme, it said.
In its performance audit report tabled in Parliament today, CAG asked the Department of Commerce to review “export incentives allowed on G&J exports, product category and country wise, considering the volume and value of re-imports involved, to safeguard the interest of revenue and to prevent round tripping”.
Further, it asked the Central Board of Excise and Customs (CBEC) to consider rationalising the duty structure so that Foreign Exchange Earning could at least be at par with duty foregone under the Foreign Trade Policy (FTP).
The G&J industry contributes 15% to the export basket. The major product categories of this industry are gold and diamond jewellery. India's diamond manufacturing sector employs about 10 lakh people across the country.
The CAG report on customs on gold, precious metals and jewellery points at its performance audit has a revenue implication of Rs 1,003.37 crore in addition to systemic issues worth Rs 19,522.67 crore and internal control matters which could not be quantified.
The import of gold, jewellery and related items increased from Rs 3.50 lakh crore in 2010-11 to Rs 3.81 lakh crore in 2014-15. Export of similar goods also increased from Rs 1.98 lakh crore in 2010-11 to Rs 2.53 lakh crore in 2014-15.
“The export growth in 201415 was much below the rate of 25% envisaged in the Department of Commerce (DOC) strategy, affecting employment generation and other economic indicators,” the report said. PTI