India's stimulus package for gold, jewellery sector

February 26, 2009

Commodity Online
NEW DELHI: The employment oriented Gems and Jewellery sector in India has got a fresh boost with the series of measures announced by Kamal Nath, Minister of Commerce and Industry  on Thursday.

The Export Promotion Council for Gems and Jewellery and Star Trading Houses (in the Gems and Jewellery sector), besides Diamond India Limited, MSTC Limited and STCL Limited have now been added under the list of nominated agencies notified under para 4 A.4 of foreign trade policy for the purpose of import of precious metals.

Surat in Gujarat, which is home to thousands of diamond units with lakhs of diamond workers has been recognized as “Town of Export Excellence”.

The export facilitation measures as announced today also state that authorized persons of Gems and Jewellery units in Export Oriented Units shall be allowed personal carriage of gold in primary form up to 10 kg. in a financial year subject to RBI and customs guidelines.

While a full year policy for 2009-10 will be unveiled in due course by the next Government, the following measures were announced by the Government  to further simplify procedures and make life of our exporters a bit more easy:-

 Duty credit scrips under Chapter 3 and under DEPB scheme shall now be issued without waiting for realization of export proceeds.

 Export incentives have been provided for certain items like Technical textiles, Stapling machine, Handmade carpets and Dried vegetables. In addition, incentives of Rs. 325 crores would be provided for leather, textiles, etc for exports w.e.f. 1/4/2009.

 STCL Limited, Diamond India Limited, MSTC Limited, Gem & Jewellery Export Promotion Council and Star Trading Houses (only for gem and jewellery sector) have been added under the list of nominated agencies notified under Para 4A.4 of Foreign Trade Policy for the purpose of import of precious metals.

 Import restrictions on worked corals have been removed to address the grievance of gem and jewellery exporters.
 Bhilwara in Rajasthan and Surat in Gujarat have been recognized as Towns of Export Excellence, for textiles and diamonds respectively.

 At present, Govt. recognizes Premier Trading Houses based on an export turnover of Rs.10,000 crores in the previous three years and the current year taken together. In view of the prevailing global slowdown, the threshold limit for recognition as Premier Trading Houses is now been reduced to Rs.7500 crores.

 Under EPCG scheme, in case of decline in exports of a product(s) by more than 5%, the export obligation for all exporters of that product(s) is to be reduced proportionately. This provision has been extended for the year 2009-10, for exports during 2008-09.

 At present, DEPB/Duty Credit Scrip can be used for payment of duty only on items which are under free category. The utilization is now extended for payment of duty for import of restricted items also.

 The procedural formalities for claiming duty drawback refund and for getting refund of Terminal Excise Duty for deemed exports is further simplified.

 Export of blood samples is now permitted without license after obtaining ‘no objection certificate’ from Director General of Health Services (DGHS).

 Supply of an Intermediate product by the domestic supplier directly from their factory to the Port against Advance Intermediate Authorisation, for export by ultimate exporter, has been allowed.

 Re-credit of 4% SAD, in case of payment of duty by incentive scheme scrips such as VKGUY, FPS and FMS, has now been allowed.
An independent office of DGFT at Srinagar.

 In case of Advance Authorisation for Annual Requirement where Standard Input-Output Norms are not fixed, the provisions in Foreign Trade Policy have been aligned with the relevant Custom Notifications.

 Value cap applicable under DEPB have been revised for two products.

 Export through Krishnapatnam seaport has been included for the purpose of Export Promotion Scheme.

 Electronic Message Transfer facility for Advance Authorisation and EPCG Scheme established for shipments from EDI ports w.e.f. 1.4.2009. Requirement of hard copy of Shipping Bills dispensed with thereafter for Export Obligation discharge.

 Authorised person of Gem & Jewellery units in EOU shall be allowed personal carriage of gold in primary form up to 10 kgs in a financial year subject to RBI and customs guidelines.

 For Advance Licenses issued prior to 1.4.2002, the requirement of MODVAT/CENVAT certificate dispensed with in case the Customs Notification itself prescribed for payment of CVD. This will help in closure of a number of pending advance licences.

 Export obligation period against advance authorizations extended up to 36 months in view of the present global economic slowdown.

 Re-imbursement of additional duty of excise levied on fuel would also be admissible for EOUs.

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