Procedure for
Supply of Duty Free Gold to Small Jewellery to Exporters by Nominated Agencies
[CBEC Circular No. 28 dated 14th October 2009]
Sub: Export against supply by Nominated Agencies- procedure and
guidelines.
Reference is invited to Board's Circular No. 24/98-Cus dated
20.04.1998 as amended by Board’s circular No. 12/2008-Cus dated 24.07.2008
(para 27) regarding procedure to be followed by the Nominated Agencies for
supplying duty free gold to exporters under various schemes under the EXIM
Policy 1997-2002.
2. In order to
address the difficulties in supply of gold, silver and platinum to small
jewellery exporters, DGFT has included 5 more new agencies/entities as
“nominated agencies” for import of gold/silver/platinum (hereinafter referred
as the “precious metal”). Now the nominated agencies are as under:
(1) Metals and
Minerals Trading Corporation limited (MMTC);
(2) Handicraft and
Handloom Export Corporation (HHEC);
(3) State Trading
Corporation (STC);
(4) Project and
Equipment Corporation of India Ltd (PEC);
(5) STCL Ltd;
(6) MSTC Ltd;
(7) Diamond India
Limited (DIL);
(8) Gems &
Jewellery Export Promotion Council (G&J EPC);
(9) A Star Trading
House (only for Gems & Jewellery sector) or a Premier Trading House under
paragraph 3.10.2 of Foreign Trade Policy; and
(10) Any other agency
authorised by Reserve Bank of India (RBI)”;
3. DGFT has
specified minimum supply criteria of 15% by nominated agencies (other than the
designated banks nominated by RBI and Gems & jewellery units operating
under EOU and SEZ scheme) and laid down procedure and condition to be followed
by these nominated agencies (other than the designated banks nominated by RBI
and Gems & jewelry units operating under EOU and SEZ scheme) vide Policy
circular No. 77 (RE-2008)/2004-09 dated 31.03.2009 as amended from time to
time. Relevant notifications No. 57/2000-Cus dated 08.05.2000 and 52/2003-Cus
dated 31.03.2003 have been suitably amended vide notification No.
106/2009-Customs dated 14.09.2009 allowing aforesaid nominated agencies duty
free import of precious metals for supply to exporters for manufacture of
jewellery and export thereof subject to the procedure and conditions specified
by DGFT.
4. In order to
avoid divergent practices and to streamline supply of precious metal for
exports, the following procedure, supplementing the procedure specified by
DGFT, is being prescribed:
(i) the Nominated
Agencies shall be allowed import of precious metal for warehousing in their own
bonded vaults. The vaults shall be licensed by the jurisdictional Dy/ Asstt.
Commissioners of Customs or Central Excise (hereinafter referred as the “said
officer”) under Section 58 of the Customs Act, 1962;
(ii) the Nominated
Agencies shall furnish a bond to the satisfaction of the said officer
undertaking to properly account for the warehoused precious metal and also to
discharge the duty liability at the prescribed effective rate of duty in the
event of the exporter not fulfilling his export obligation within the
prescribed period;
(iii) the Nominated
Agencies may be permitted to give a general bond for an estimated amount of
duty worked out at the effective rate involved in their monthly import or may
give a revolving bond starting with a bond equal to the duty estimated at the
effective rate on quantity of precious metal likely to be imported in a month;
(iv) the Nominated
Agencies (other than designated banks nominated by RBI and public sector
undertakings) shall also furnish a bank guarantee equal to 25% of the estimated
amount of duty involved on import of precious metals in a month or the bonds
executed by them. The exemption from bank guarantee to the designated banks
nominated by RBI and public sector undertakings shall be admissible subject to
the following conditions:
(a) the nominated
agency has not defaulted in following the procedure and condition specified by
DGFT;
(b) in case of
default in export of jewellery manufactured out of precious metal supplied by
nominated agency within the prescribed period, the nominated agency have not
defaulted in payment of duty within the specified period;
(c) the nominated
agency has not been served with a show cause notice or no demand confirmed
against it, during the preceding 3 years, for violations invoking fraud or
collusion or any wilful misstatement or suppression of facts under relevant
provisions of the Customs Act,1962, the Central Excise Act, 1944, the Finance
Act, 1994 covering Service Tax, the Foreign Trade (Development &
Regulation) Act, 1992, the Foreign Exchange Management Act,1999 and the rules
made thereunder;
(v) the
Commissioner of Customs may allow more than one Nominated Agencies to keep
their imported goods in the same vault provided the quantities are kept
segregated and separate accounts are maintained;
(vi) the Nominated
Agencies will be required to keep the imported duty free goods for supply to
the exporters segregated from the quantities imported for domestic consumption
on payment of duty;
(vii) the Nominated
Agencies shall be exempt from following the double lock system. Physical
presence of the Bond Officer will not be required for bonding or ex-bonding the
goods. No cost recovery charges would be payable by the Nominated Agencies;
(viii) the Nominated
Agencies can be visited by Custom officers for surprise audit or checks. The
Commissioner should devise a system of random audit at least once in 6 months
initially and once in a year subsequently;
(xi) the exporters
intending to receive precious metal from the Nominated Agencies will register
themselves with their jurisdictional Asstt. Commissioners who will issue them a
one-time Certificate specifying therein the details of their units such as name
and address of the unit and the head/owner of the organization. This certificate
has to be produced to the Nominated Agencies while taking gold. The units shall
submit an undertaking to the Asstt. Commissioner without bank guarantee to
follow the conditions of notification under which they are receiving duty free
precious metal and export the jewellery made therefrom within the period
stipulated in the Foreign Trade Policy. The EOU units may submit a
self-declaration to the Nominated Agencies stating therein the details of their
unit;
(x) the Nominated
Agencies would allow clearance of the goods for export production under the
relevant exemption notification under their own internal documents and would
submit a consolidated monthly account in format enclosed of the goods released
exporter-wise and the duty involved which will be worked on the basis of
effective rate of duty;
(xi) the Nominated
Agencies shall maintain an account of the goods released to the exporters
(exporter-wise) on day-to-day basis. This account shall be liable for
inspection by any Customs Authorities as the account of a bonded warehouse;
(xii) the exporter
shall furnish the EP copy of the shipping bill and Bank certificate of
realization in Appendix 22A to the nominated agencies as a proof of having
exported the jewellery made from the duty free goods released to them within
the period prescribed in the Foreign Trade Policy;
(xiii) wherever such
proof of export is not produced within the period prescribed in the Foreign
Trade Policy, the Nominated Agencies shall (without waiting for its recovery
from the exporter) deposit the amount of duty calculated at the effective rate
leviable on the quantity of precious metal not exported, within 7 days of
expiry of the period within which the jewellery manufactured out of the said
precious metal was supposed to be exported. The duty so paid by the Nominated
Agency shall be reflected in the monthly statement prescribed in para (x)
above. The Nominated Agencies will settle their claim with the exporter at
their own level;
(xiv) the Nominated
Agencies shall report the cases of failure, to export the jewellery made out of
precious metal released to the exporter, to the Commissioner of Customs in
whose jurisdiction the licensed vault of the Nominated Agencies is installed;
and
(xv) the exporters
operating under replenishment scheme may be permitted to receive precious metal
from the Nominated Agencies on submission of EP copy of the shipping bill.
Nominated agencies shall also monitor the export proceeds realization of such
shipments against which they have replenished precious metal, on the basis of
Bank certificate of realization in Appendix 22A to be submitted by exporters to
the nominated agencies, as a proof of having exported the jewellery.
5. The Circular
No. 24/98-Cus dated 20.04.1998 stands withdrawn.
6. Wide publicity
may please be given to these instructions by way of issuance of Public/Trade
Notice. Difficulties, if any, in implementation of these instructions, may be
brought to the notice of the Directorate General of Export Promotion.
7. This issues
with the approval of Central Board of Excise & Customs.
Monthly Statement to
be sent by the Warehouse Owner to the Commissioner of Customs
1. Name of the
Warehouse Owner:
2. Full Address:
3. Bond No.&
Date:
4. Amount of Bond:
5. Accepted by:
|
Receipts |
||||||
|
Date |
Date of Import |
B/ E No. & Date |
Date of reware-
housing |
Quantity of Gold/
Silver / Platinum |
Value |
Signature of
Warehouse owner/ representative |
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
|
Issue |
||||||||||
|
Date of Issue |
Name & Address of
the Exporter |
Qty. issued Gold/
Silver Platinum |
Value |
Duty on the goods
issued |
Shipping Bill No.
& Date |
Qty. exported |
Qty. not exported
in time |
Details of such
shipments where export proceeds not realized within prescribed period |
Duty credited to
customs TR-6 Challan No. & Date |
Signature of the
Warehouse owner/ representative |
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
F.No.:DGEP/EOU/16/2009