Procedure for Supplying Duty Free Gold to Exporters by Nominated
Agencies
The
following Public Notice was issued by the Commissioner of Customs, Air Cargo
Complex, Mumbai on 8 December 2009.
[Customs
Public Notice No. 32 dated 8th December 2009]
Sub: Export against
supply by nominated agencies – procedure and guidelines
Attention of
Importers, CHAs, nominated agencies (MMTC, HHEC, STC, PEC, STCL Ltd, MSTC Ltd,
DIL, G & J EPC, star trading house (only for Gem & Jewellery
Sector) or Premier Trading House under para 3.10.2 of Foreign Trade Policy and
any other agency authorized by RBI), Associates and others are invited to
Public Notice 15/98 dated 04/05/98 and Public Notice 16/98 dated 30.5.1998
issued based on Board 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
mis-statement 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 shall 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 and Public Notices No 15/98 dated
04.05.98 and 16/98 dated 30.05.98 stand withdrawn.
F.No: S/6-Gen- 693/2009 GPS ACC