Diamond Imprest Authorization (DIA) Scheme to Allow Duty Free
(BCD-10%; IGST-1.5%) Diamonds in Cut and Polished Form from Source Countries
like Botswana and Namibia Introduced
·
Scheme
to Support MSME Diamond Exporters and Safeguard Domestic Industry
·
The
new scheme earlier issued under Customs Notification 42/28.04.1999 (p.1137 of BIG’s Easy Reference Customs
Tariff)
·
Minimum
10% value add for duty free export, No one to one correlation between import
and export only small demands of ¼ carat allowed.
·
Only
large exporter allowed with Import and Export through Mumbai Airport
·
No
transfer to vendors sub-contractors allowed
·
Value
addition through trading?
·
No
rupee trading including Vostro Account, only hard currency
·
Reaction
to plummeting export to be due to over import!
·
Bond
and Bank Guarantee for Duty
·
A
minimum value addition of l0% by realizing in Free Foreign Exchange, within
specified time limits.
·
Diamond
Imprest Authorisation does not apply to Lab-Grown Diamonds (LGDs).
·
Two
Star Export House status or above, and having achieved a minimum export
performance of US$ 15 million in Cut & Polished Diamonds each year for the
past three financial years.
·
5%
of the average annual export performance of Cut & Polished Diamonds over
the previous three financial years subject to a maximum value of US$:15
million.
·
All
imports and exports shall be made only through Mumbai Air Port.
· Diamond Imprest Authorisation and material imported under Diamond Imprest Authorisation shall be subject to 'Actual User' condition.
4.60
Diamond Imprest Authorisation (DIA)
4.61
Eligibility
4.62
Export Obligation
4.63
Details of Duties exempted
4.64.
Actual User Condition and Pre-Import Condition for Diamond Imprest
Authorisation
Department
of Commerce, Government of India has introduced the Diamond Imprest
Authorization (DIA) Scheme on 21st of January 2025, aiming to enhance the
global competitiveness of India’s diamond sector. This scheme provides a
streamlined mechanism for duty free import of Natural Cut and Polished
Diamonds, and there by promoting value addition and boosting exports. The
Scheme will be implemented with effect from 01.04.2025.
Key
Features of the Scheme:
·
This
scheme allows the duty-free import of Natural Cut and Polished Diamonds, of
less than ¼ Carat (25 Cents).
·
This
scheme mandates export obligation with a value addition of 10%.
·
All
Diamond exporters holding Two Star Export House status and above and having US
$15 Million exports per year, are eligible for availing the benefit under this
scheme.
The
scheme is made in response to Beneficiation policies undertaken in a number of
natural diamond mining countries like Botswana, Namibia Angola etc where
Diamond manufactures are obliged to open cut and polishing facilities for a
minimum percentage of value addition. This scheme is aimed towards retaining
India’s position as a global leader in the entire value chain of Diamond
industry.
The
scheme is designed to provide a level playing field for Indian diamond
exporters, particularly MSME exporters, enabling them to compete effectively
with larger peers. It aims to prevent the potential flight of investments by
Indian diamantaires to diamond-mining destinations. Additionally, the scheme is
expected to generate more employment opportunities, particularly for diamond assorters and in the processing of semi-finished diamonds
in factories. By facilitating Indian exporters, it seeks to protect the
domestic diamond processing industry and sustain the associated employment.
The
DIA Scheme reinforces India’s position as a leading player in the global
diamond trade, ensuring compliance with international standards while
facilitating ease of doing business. This scheme also expected to create
employment opportunities for skilled craftsmen in diamond industry and is also
expected to increase the export of Cut and Polished Diamond from India.
The
diamond industry is witnessing a steep decline in exports and job losses for
the workers. This scheme is expected to combat this trend and will rejuvenate
the Diamond Industry.
[DGFT
Notification No. 53/2024-25 dated 21 January, 2025]
Effect of this Notification: The 'Diamond Imprest Authorisation ' (DIA)
Scheme has been introduced to boost exports of Diamonds from India. The scheme will
be implemented with effect from 01.04.2025.
Subject:
Introduction of new Scheme as 'Diamond Imprest Authorisation' under Chapter 4
of Foreign Trade Policy 2023.
S.O.(E):
In exercise of powers conferred by Section 3 read with Section 5 of Foreign Trade
(Development and Regulation) Act, 1992, read with Paragraph 1.02 of the Foreign
Trade Policy, 2023, as amended from time to time, the Central Government hereby
notifies the following amendments in Chapter 4 of the Foreign Trade Policy 2023:
I.
New paras may be added to the FTP 2023, as follows:
4.60
Diamond Imprest Authorisation (DIA)
Diamond
Imprest Authorization may be granted for the import of Natural Cut and Polished
Diamonds, including semi-processed, half-cut, and broken diamonds, each weighing
no more than 1/.i Carat (25 Cents),
against which the physical export of Natural Cut and Polished Diamonds has to be
carried out. Such Authorisation shall carry an export obligation to achieve a minimum
value addition of l0% by realizing in Free Foreign Exchange, within specified time
limits, which has to be discharged in accordance with the procedure specified in
this behalf. The Diamond Imprest Authorisation does not apply to Lab-Grown Diamonds
(LGDs).
4.61
Eligibility
An
exporter with a Two Star Export House status or above, and having achieved a minimum
export performance of US$ 15 million in Cut & Polished Diamonds each year for
the past three financial years and having filed all GST and Income Tax returns for
those years, may be granted a Diamond Imprest Authorization. This authorization
allows the import of Natural Cut & Polished Diamonds up to 5% of the average
annual export performance of Cut & Polished Diamonds over the previous three
financial years subject to a maximum value of US$:15 million.
4.62
Export Obligation
The
export obligation against each import consignment shall be fulfilled within a period
of six months from the date of clearance of such consignment through Customs. All imports and exports shall be made only through
Mumbai Air Port. The importer shall be required to maintain relevant/ appropriate
records of imports & exports for subsequent inspection if any.
4.63
Details of Duties exempted
Imports
under Diamond Imprest Authorisation are exempted from payment of Basic Customs Duty,
Additional Customs Duty, Education Cess, Anti- dumping Duty, Countervailing Duty,
Safeguard Duty, Transition Product Specific Safeguard Duty, wherever applicable.
Such, imports are also exempt from whole of the Integrated Tax and Compensation
Cess leviable under sub-section (7) and sub-section (9) respectively, of section
3 of the Customs Tariff Act, 1975 (51 of 1975).
4.64.
Actual User Condition and Pre-Import Condition for Diamond Imprest
Authorisation
i. Diamond Imprest Authorisation
and material imported under Diamond Imprest Authorisation shall be subject to 'Actual
User' condition. The same shall not be transferable even after completion of export
obligation.
ii. Diamond
Imprest Authorisation is subject to Pre-Import Condition.
2.
Sub para (v) may be added in para 4.32 of FTP as under:
(v) Diamond Imprest Authorisation.
This
issues with the approval of Minister of Commerce & Industry.
(Issued
from File No. 01/94/ 180/ 152/AM20/PC-4)