Eximkey - India Export Import Policy 2004 2013 Exim Policy
Duty Exemption Scheme Gold by MMTC for sale/loan to jewellery exporters-procedure Notified

Circular No.38/1996-Cus. date 9/7/96


Sub: Import of Gold by MMTC for sale/loan to jewellery exporters - Procedures-Reg.

Under para 88 of the EXIM Policy read with the various relevant customs exemption notifications (Nos. 177/94,3/88, 277/90 and 144/93) MMTC/SSI/ STC/HHEC are authorised to import gold and sell/lend the same to actual users in the various EPZs or to exporters in the EOU/DTA sector, with an export obligation imposed thereon. Currently, it is reported that the procedure is that MMTC who is the major importer, imports gold, clears for home consumption after executing a bond for observing the conditions of exemption, without any security and passes on the gold to the actual users.

2. Recently, it came to notice of the Ministry that substantial quantity of gold so imported had not been duly accounted for, by the concerned exporters. In some cases the gold as well as the loanees have been found missing, indicating gross abuse of duty exemption. Keeping in view the sensitive nature of this commodity and the risks to revenue, the matter was reviewed in consultation with the Ministry of Commerce and it has been decided that the following procedure be adopted in respect of gold imported by MMTC under any of the above said duty exemption schemes:-

(a) MMTC may be allowed to open private bonded warehouses, subject to the observance of the Board's existing instructions on setting up such warehouses, wherein the imported gold would be kept by MMTC in bond;

(b) Clearance from the said bonded warehouse may be taken by all categories of manufacturer-exporters covered by these exemption schemes by filling ex-bond Bills of Entry in their own name;

(c) A manufacturer-exporter shall make a request in writing for duty exemption as abovementioned and he will also execute the necessary bonds as mentioned in the said exemption schemes;

(d) The bond should be secured by a Bank Guarantee for 10% of the duty amount leviable on the gold but for the duty exemption. If any exporter so desires he may be allowed to maintain a Running Bond Account with the Customs House so that he does not have to obtain and file separate Bank Guarantees for each Bill of Entry.

(e) MMTC shall be responsible for safe keeping of the gold, for making physical delivery thereof to the manufacture exporters-against duly assessed Bills of Entry on which ex-bond clearance has been allowed by a proper Officer, and for rendering to customs a complete account of gold received and kept by them in bond. In their capacity as a bonder, they will also maintain the prescribed records, including the name, address and other specified details of Importers and the quantity of gold released to and exported by each exporter. They would also keep the Customs authorities informed of any exports which are due but have not taken place within the permissible period.

Presently, as per the Exim Policy, exports are required to be completed within 60 days from the date of release of the gold issued on loan or 90 days in case of out right purchase and extendable by the DGFT by another 30 days. In the event of an exporter failing to discharge the export obligation within the ascribed period, the responsibility for retrieving the gold, delivered or loaned by the MMTC to the exporter, shall continue to remain with the MMTC.

(f) The record regarding execution of bond and submission of the bank guarantees by the intending exporters, as prescribed, shall be maintained by the Assistant Commissioner of Customs in the same way as is required to be maintained for exports of excisable goods under bond. However, on submission of proof of exports, the corresponding guarantee may be re-credited to the exporter's account and may be allowed to be used for the subsequent ex-bond clearances provided the validity period of the bond and the bank guarantee so permits. However, in the event of the exporter failing to produce proof of export on the expiry of the prescribed period, the Asstt. Commissioner may proceed to recover the amount of Customs duty leviable on the quantity of gold released to the exporter free of duty and to encash the bank guarantee. In addition, he may proceed to recover the balance of Customs duty if any, not covered by the bank guarantee, from the exporter as provided for in the law.

(g) The performance of exporters who have received duty free clearance of gold should be carefully watched, and in case of default immediate steps should be taken to encash the guarantee and safeguard the revenue, recover the gold, in addition to any other revenue and penal action allowed under the law. The Commissionerates should devise an effective monitoring system to ensure that no bond/guarantees lapses for want of action and no defaulter is allowed to draw any further gold.

The above said procedures may be brought into effect immediately, and the trade informed suitably. Proper steps may be taken for smooth transition from existing scheme to new scheme without dislocating the trade.

Sd/-
(Vijay Kumar)
Under Secretary to the Government of India

F.N0..305/80/94-FTT

Presented by eximkey.com

Trade Intelligence
Search for latest information on item wise exports and imports, from all major Indian ports.

Username
Password