Indian Fiscal Budget 1997-98: EXIM POLICY 1997-2002
DIAMOND, GEM & JEWELLERY EXPORT PROMOTION SCHEMES
Scheme for Gem and Jewellery
8.1Exporters of gem and jewellery are eligible to import their inputs by obtaining Replenishment (REP) Licences and Diamond/ DTC Imprest Licences from the licensing authorities in accordance with the procedure specified in this behalf.
8.2The exporters of gem and jewellery products listed in Appendix 30-A of the Handbook (Vol.1) shall be eligible for grant of Replenishment Licences at the rate and for the items mentioned in the said Appendix to import and replenish their inputs. Exports through third party are also admissible for REP Licences provided the EP copy of the Shipping Bill shows the names of both the manufacturer and the third party and REP licence against such exports is claimed by either of the parties after furnishing a disclaimer from the other party. Such REP licences will be transferable. The exports made in fulfilment of export obligation against Diamond/DTC Imprest Licences shall not qualify for this benefit.
Diamond and DTC Imprest Licences
8.3Diamond Imprest Licence and DTC Imprest Licence may be issued, in advance, for import of rough diamonds. Such licences shall carry an export obligation which has to be discharged in accordance with the procedure specified in this behalf. These licences or the materials imported against them shall be freely transferable after the export obligation has been fulfilled.
Diamond Imprest Licence
8.4An exporter may apply for a licence
(a)against the best export performance of cut and polished diamonds in a licensing year during the preceding three licensing years plus 25% thereof, if he has a minimum of three preceding licensing years of export performance. However, the value of cut and polished diamonds exported towards fulfilment of export obligation under DTC Imprest Licence shall be excluded for the purpose of calculation of his entitlement for Diamond Imprest Licence;
(b)against a valid export order in his own name.
8.5The export obligation against each consignment shall be fulfilled within a period of five months from the date of clearance of such consignment through Customs. Exports made from the date of receipt of an application under this scheme by the licensing authority may be accepted towards discharge of export obligation.
DTC Imprest Licences
8.6A regular DTC sight holder of preceding three licensing years may be allowed annual DTC Licence equal to 1.5 times the consolidated value of all the DTC sights received by him excluding the sights cleared against Replenishment Licence in the preceding licensing year. The new sight holders may also apply for licences on monthly basis on allotment of sight from DTC, London. These licences will be valid for import from DTC, London only.
8.7The DTC Imprest Licence holders are allowed to pay commission/brokerage charges upto 1.5% of cif value of import provided there is a corresponding increase in the export obligation.
8.8The export obligation against each sight under DTC Imprest Licence shall be completed within a period of five months from the date of import of the first consignment against such sight.
8.9In case the sights allocated to a regular sight holder are not covered by the annual DTC Imprest Licence, application for another DTC Imprest Licence in the same licensing year shall be considered keeping in view the monthly sights expected in the remaining period of a licensing year.
Bulk Licences for Rough Diamonds
8.10Bulk licences for rough diamonds are issued for import of rough diamonds from any source, with an obligation to supply such diamonds to the holder of valid REP/Diamond Imprest Licence and EOU/EPZ units. The Bulk Licence holder are also allowed to export rough diamonds upto 10% of the value of such rough diamonds imported against the Bulk Licence. The supply/export of such rough diamonds shall be completed within a period of 12 months from the date of issuance of licence.
8.11The following persons are eligible to apply for Bulk Licences in accordance with the procedure specified in this behalf.
(i)M/s.Hindustan Diamond Company Ltd (HDCL), Mumbai;
(ii) MMTC Ltd, New Delhi;
(iii)Exporter whose annual average FOB value of export of cut and polished diamonds during the preceding three licensing years has been not less than Rs. 75 crores.
8.12If the eligible person is a limited company registered under the Companies Act, its 100% owned subsidiary may apply for the Bulk Licence in lieu of the eligible person.
Private Bonded Warehouse for Rough Diamonds
8.13Private Bonded Warehouses may be set up in EPZ or DTA for import, stock, export and sale of rough diamonds. The sale of rough diamonds to DTA units shall be against a valid licence.
Schemes for Gold/ Silver/ Platinum Jewellery
8.14Exporters of gold/silver/platinum jewellery and articles thereof may import their essential inputs such as gold, silver, platinum, mountings, findings, rough gems, precious and semi-precious stones, synthetic stones and unprocessed pearls etc. in accordance with the procedure specified in this behalf.
8.15The exporter availing the schemes of gold/silver/platinum jewellery and articles thereof may obtain gold/silver/platinum from the nominated agencies. The nominated agencies are MMTC Ltd, Handicraft and Handloom Export Corporation (HHEC), State Trading Corporation (STC), State Bank of India (SBI) and any agency authorised by Reserve Bank of India (RBI).
Items of export
8.16The following items, if exported, would be eligible for the facilities under these schemes:
(a)Gold jewellery and articles(other than coins), whether plain or studded, containing gold of 8 carats and above;
(b)Silver jewellery and articles (excluding coins and any engineering goods) containing more than 50% silver by weight;
(c)Platinum jewellery and articles (excluding coins and any engineering goods) containing more than 50% platinum by weight.
8.17The value addition will be calculated with reference to the value of gold/silver/platinum content including admissible wastage. The minimum value addition shall be:
(a) 10% for plain gold/ platinum jewellery and articles thereof;
(b)15% for studded gold/platinum jewellery and articles thereof;
(c)25% for silver jewellery and articles thereof.
8.18Under the schemes for gold/silver/platinum jewellery, the wastage or manufacturing loss shall be admissible as specified in the Handbook (Vol.1).
Export against supply by Foreign Buyer
8.19Where the export orders are placed on nominated agencies, the foreign buyer may supply to the nominated agencies, in advance and free of charge, gold, silver, alloys, findings and mountings of silver and gold of 18 carats and below for manufacture and export. The exports may be made by the nominated agencies directly or through their associates. The import and export of mountings and findings shall be on net to net basis.
Export through Sale at Exhibitions
8.20 The nominated agencies and their associates with the approval of the Ministry of Commerce, and others with the approval of Gem & Jewellery Export Promotion Council (G&J EPC) may export gold/silver/platinum jewellery and articles thereof for holding exhibitions abroad. The exports shall be subject to the following conditions :
(i) Items not sold abroad shall be re-imported within 45 days of the close of the exhibitions;
(ii) The gold/silver/ platinum content on items sold in such exhibitions may be imported as replenishment not later than 60 days after the close of the exhibition.
8.21An EOU/EPZ unit may also participate in exhibitions in India/abroad. No sale, however, shall be permitted in exhibitions held in the country. The procedure for movement of the jewellery from these units and back shall be as prescribed by the customs authorities.
Export against supply by Nominated Agencies
8.22 The exporter may obtain the gold/silver/ platinum as an input for export products from nominated agencies in advance or as replenishment after exports in accordance with the procedure specified in this behalf.
Export against Advance Licence
8.23A quantity based Advance Licence may be granted for the duty free import of:
(i) gold of fineness not less than 0.995 and mountings, sockets, frames and findings of 8 carats and above;
(ii) silver of fineness not less than 0.995, mountings, sockets, frames and findings containing more than 50% silver by weight;
(iii)platinum of fineness not less than 0.9999, mountings, sockets, frames and findings containing more than 50% platinum by weight.
8.24Such licences shall carry an export obligation which will be required to be fulfilled in accordance with the procedure specified in this behalf.
8.25The advance licence holder may obtain gold/silver/platinum from the nominated agencies in lieu of direct import in accordance with the procedure specified in this behalf.
Exports from EPZs/EOUs
8.26The provisions in Chapter 9 of the Policy will be applicable to gem and jewellery EOUs and EPZ Units except for the provisions contained herein.
8.27In the event of a unit ceasing its operation, gold and other precious metals, alloys, gem and other materials available for manufacture of jewellery, shall be handed over to an agency nominated by the Ministry of Commerce at the price to be determined by that agency.
8.28These units may import their essential inputs for export production. They may also source gold of fineness not less than 0.995 through the nominated agencies.
8.29 An exporter shall also be required to achieve an additional value addition of 5% over the value of cut and polished diamonds, precious and semi-precious stones, pearls and synthetic stones used as studdings over and above the value addition prescribed for the gold/silver /platinum content.
8.30The minimum value addition for units exporting loose cut and polished diamonds and precious and semi-precious stones shall be calculated on the basis of the corresponding replenishment rates available to such exports from DTA as given in Appendix 30-A of the Handbook (Vol- 1).
8.31Jewellery samples allowed to be imported may be re-exported after proper identification.
8.32 Re-export/supply of dead-stock or broken stones/rough diamonds upto 5% of the value of import/indigenously procured such items by holder of valid REP/Diamond Imprest Licence may be allowed by the Development Commissioner of the EPZ/EOU concerned.
8.33Partly processed jewellery may also be exported subject to realisation of the prescribed minimum value addition.
8.34 EPZ/EOU units are allowed to receive machine made gold and silver chains from DTA against exchange of gold and silver of the same purity and quantity in weight as that of the said gold and silver chains. The DTA units supplying such chains, against exchange of gold shall not be entitled for deemed export benefits.
8.35Samples made in wax models, silver models and rubber moulds may be permitted for export with the permission of Development Commissioner of the EPZ/EOU concerned provided its value does not exceed Rs.10,000 in a year.
8.36EOU/EPZ units are also permitted to sell 10% of value of exports of the preceding year to DTA provided the recepient furnishes a freely transferable Special Import Licence for clearance of such item from EOU/EPZ and agrees to pay applicable duty from his EEFC account in free foreign exchange. Such supply shall, however, be subject to the achievement of prescribed value addition.
8.37An exporter is eligible for freely tranferable Replenishment (REP) Licence at the rate of 87% of the FOB value of exports of plain gold jewellery and articles thereof, and 80% of the FOB value of export of studded gold jewellery and articles thereof. Such REP licences are valid for import of items as given in Handbook (Vol.1).
Gem Replenish-ment Licence
8.38Gem Replenishment (Gem REP) Licence may be issued under the schemes for export of gold/silver/platinum jewellery and articles thereof as given in paragraph 8.19, 8.20, 8.22 and 8.23 of the Policy. In the case of plain gold/silver/platinum jewellery and articles, the value of such licences shall be determined with reference to the realisation in excess of the prescribed minimum value addition. In the case of studded gold/silver/platinum jewellery and articles thereof, the value of Gem Replenishment Licence shall be determined by taking into account the value of studdings used in items exported, after accounting for the value addition on gold/silver/platinum including admissible wastage. Such Gem Rep licences shall be freely transferable.
Gem REP rate and item
8.39The scale of replenishment and the item of import will be as prescribed in the Handbook (Vol.1).
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