The government has again permitted gold and silver jewellery exporters to replenish the precious metal duty free after selling it at international exhibitions, a move which would help in promoting growth of the sector.
This facility of duty-free replenishment of precious metals was stopped after the implementation of the goods and services tax (GST).
The Directorate General of Foreign Trade (DGFT) on Monday issued a notification in this regard by amending a provision of the foreign trade policy (FTP) which had stated that "no replenishment" of the precious metal shall be available to the exporter or manufacturer where they are availing benefits in respect of exported product.
An official of the Gems and Jewellery Export Promotion Council of India (GJEPC) said it is a welcome move as exporters were demanding for quite some time to resume the facility.
"It is the re-introduction of the replenishment scheme for gold and silver on goods exported/sold in overseas exhibitions," the official said.
He added that earlier, the duty-free replenishment was not available for jewellery sold at exhibitions abroad, so exporters were not selling, but now, they will get duty-free gold for the quantity sold abroad, which will give a boost to exports.
Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said, "It was a long-pending demand and logical as IGST (integrated goods and services tax) and ITC (input tax credit) refund provide refund of GST while replenishment give benefits of basic customs duty. The two are mutually exclusive."
Exports of gems and jewellery dipped 8.5 per cent during the April-July 2019 period to USD 9.7 billion.
Gold jewellery declined 4.8 per cent during the period to USD 4 billion.
According to jewellery exporters, rise in import duty of gold to 12.5 per cent in the Budget have impacted the growth of the sector and allowing duty-free replenishment would increase availability of the precious metal.
Disclaimer: No Business Standard Journalist was involved in creation of this content
