Value Addition Formula in Gem and Jewellery
Clarified
[Policy Circular No. 28/2019-2020 dated
27 September 2019]
Subject: Value Addition Norms for availing duty exemption
in Gem and Jewellery.
Clarifications has been sought from this
Directorate on the value addition calculations as per the provisions of FTP/HBP
for export of Gold/silver/platinum jewellery and articles.
2. Para 4.38
of FTP on Value Addition in Gem and Jewellery is reproduced
below:
Minimum
Value Addition norms for gems and jewellery sector are
given in paragraph 4.61 of Handbook of Procedures. It would be calculated as under:
VA=
A-B x
JOO
B
Where
A = FOB value of the export realised/ FOR value of supply received.
B = Value
of inputs (including domestically procured) such as gold/silver/platinum content
in export product plus admissible wastage along with value of other items such as
gemstone etc. Wherever gold has been obtained on loan basis, value shall also include
interest paid in free foreign exchange to foreign supplier.
Further,
under para 4.82 (c) for Replenishment scheme it is mentioned, inter-alia, that
"....price
shall be actual price at which gold/silver/platinum is purchased by nominated agencies
plus permitted service charges levied by nominated agencies shall be included with
the price of gold/ silver/ platinum for value addition...."
This
has led to seeking of clarification in the matter from this directorate.
3.
It is clarified that for the purpose of value addition, inputs in 'B' in para 4.38
mean duty free (either on advance or replenishment basis) gold/silver/platinum content
in the export product plus the admissible wastage.
4. This issues with the
approval of the DGFT.
[Issued from File No. 01/94/180/300/AM19/PC-4]