Tighter norms for gold jewellery exporters

The Centre is considering fresh measures to stop malpractices in the export of gold jewellery, said two persons familiar with the development.

A trade notice issued by the Noida Export Promotion Zone Customs collector on Thursday asked jewellery exporters not to import gold on loan. They will now have to take gold on loan only from nominated agencies and banks. Importing gold on loan is considered a banking transaction where interest is paid and hence, “banking transactions for gold exports, like taking gold on loan, shall be done in India,” said Rahul Gupta, chairman of the Export Promotion Council for EOUs and SEZs (EPCES).

Another person familiar with the development said that a recent meeting of development commissioners of SEZs discussed misuse of facilities by jewellery exporters and decided to review the practice of job work outside SEZ areas. “If it is found that misuse is rampant more stringent measures may be taken,” the source said.

The government had last week banned export of gold jewellery above 22 carats to stop re-exporting imports without major changes. According to GFMS Thomson Reuters, “Round tripping volumes recorded a sharp rise at 89 tonnes in the first half of 2017, up from 53 tonnes in the same period last year. The increase was primarily related to bringing forward exports as the cost of round-tripping post- GST was expected to increase.” The Directorate General of Foreign Trade has also liberal is ed norms for status holders in jewellery exports. This limit has been significantly increased for other sectors, but gold jewellery exporters had been kept out, according to Thursday’s notice by the DGFT.