CHAPTER 8

DIAMOND GEM & JEWELLERY EXPORT PROMOTION SCHEMES

 

Scheme for Gem and Jewellery

8.1

Exporters of gem and jewellery are eligible to import their inputs by obtaining Replenishment (REP) Licences and Diamond Imprest Licences from the licensing authorities in accordance with the procedures specified in this behalf.

Replenishment Licence

8.2

The exporters of gem and jewellery products listed in Appendix 30-A of the Handbook (Vol.1). shall be eligible for grant of Replenishment Licences at the rate and for the items mentioned in the said Appendix to import and replenish their inputs. Exports through third party are also admissible for REP Licences. The exports made in fulfillment of export obligation against Diamond Imprest Licences shall not qualify for this benefit.

 Replenishment licence may also be issued for import of consumables or for plain/studded jewellery as per the details given in para 8.88 of Handbook (Vol.1).

Diamond Imprest Licence

8.3

Diamond Imprest Licence may be issued, in advance, for import of rough diamonds from any source. Diamond Imprest Licence for import of cut & polished diamonds for mixing with cut & polished diamonds or for export as it is, may also be issued for export of cut & polished diamonds. Such licences shall carry an export obligation which has to be discharged in accordance with the procedures specified in this behalf.

Eligibility

8.4

An exporter may apply for a licence for import of rough diamonds:

 

 

(a)

Equal to the best export performance of cut and polished diamonds in any licensing year during the preceding three licensing years, if he has a minimum of three licensing years of export performance.

 

 

(b)

Against a valid export order in his own name.

 

An exporter of cut & polished diamonds, who is status holder, may also be issued a licence for import of cut & polished diamonds upto 5% of the export performance of the preceding year of cut & polished diamonds.

Export Obligation

8.5

The export obligation against each consignment shall be fulfilled within a period of five months from the date of clearance of such consignment through customs. Exports made from the date of receipt of an application under this scheme by the licensing authority may be accepted towards discharge of export obligation.

 

8.6

Deleted

 

8.7

Deleted

 

8.8

Deleted.

 

8.9

Deleted

Bulk Licences for Rough Diamonds

8.10

Bulk licences for rough diamonds are issued for import of rough diamonds from any source, with an obligation to supply such diamonds to the holder of valid REP/Diamond Imprest Licence, EOU/EPZ/SEZ units or to re-export the same. The supply/export of such rough diamonds shall be completed within a period of 12 months from the date of issuance of licence or within a period of three months from the date of import, whichever is later.

Eligibility

8.11

The eligibility to apply for Bulk Licence is prescribed in the Handbook (Vol.1).

 

8.12

If the eligible person is a limited company registered under the Companies Act, its 100% owned subsidiary may apply for the Bulk Licence in lieu of the eligible person.

Private/

Public Bonded Warehouse

8.13

Private /Public Bonded Warehouses may be set up in EPZ/SEZ/DTA for import and re-export of cut & polished diamonds, cut & polished coloured gemstones, import and re-export of rough diamonds, uncut & unset precious & semi-precious stones and DTA sales of rough diamonds, uncut & unset precious & semi-precious stones against REP/GEM REP/Diamond Imprest licences subject to payment of customs duty wherever applicable, notwithstanding anything contained in paragraph 9.21 of Policy. These private/public bonded warehouses for selling rough diamonds, uncut & unset precious & semi-precious stones in DTA shall follow the procedures given in paragraph 8.24 and 8.25 of Handbook (Vol.1). Import & re-export of cut & polished diamonds & cut & polished coloured gemstones will be subject to achievement of minimum value addition of 5%.

 

Diamond Dollar Account

 

8.13(a)

 

Firms and companies dealing in the purchase/sale of rough or cut and polished diamonds with a track record of at least 3 years in import or export of diamonds and having an average annual turnover of Rs. 5 crore or above during preceding three licensing years may also carry out their business through designated Diamond Dollar Accounts. The Diamond Dollar Account Scheme shall operate under the current licensing scheme of this chapter. This scheme shall be optional and those importers/exporters who wish to continue to use Rupee Accounts shall be allowed to do so under the existing policies. Dollars in such accounts available from bank finance and/or export proceeds shall be used only for (i) import/purchase of rough diamonds from overseas/local sources, (ii) purchase of cut and polished diamonds from local sources, (iii) repayment of the dollar loans from the bank and (iv) transfer to the Rupee Account of the exporter. Details of this Diamond Dollar Accounts Scheme (DDAS) are given in the Handbook (Vol.1).

The licence holders of Public/Private Bonded Warehouses operating under paragraph 8.13 of EXIM Policy shall also be eligible to transact their business of import, supply and re-export of rough diamonds through the designated Diamond Dollar Account. Even for the Private/Public Bonded Warehouses, the Scheme is optional and if they wish to continue to use the Rupee Account, they shall be allowed to do so under the existing EXIM Policy. The eligibility criteria mentioned above for diamond firms and companies shall not be applicable in case of Private/Public Bonded Warehouses.

(Notification No: 37 dated 11.10.2000)

 

Schemes for Gold/ Silver/ Platinum Jewellery

8.14

Exporters of gold/silver/platinum jewellery and articles thereof may import their essential inputs such as gold, silver, platinum, mountings, findings, rough gems, precious and semi-precious stones, synthetic stones and unprocessed pearls etc. in accordance with the procedures specified in this behalf.

Nominated Agencies

8.15

The exporter availing the schemes of gold/silver/platinum jewellery and articles thereof may obtain gold/ silver/ platinum from the nominated agencies. The nominated agencies are MMTC Ltd, Handicraft and Handloom Export Corporation (HHEC), State Trading Corporation (STC), The Project and Equipment Corporation of India Ltd (PEC) and any agency authorised by Reserve Bank of India (RBI). A bank, authorised by RBI, is allowed export of gold scrap for refining and import in the form of standard gold bars.

Items of Export

8.16

The following items, if exported, would be eligible for the facilities under these schemes:

 

 

(a)

Gold jewellery, including partly processed jewellery and any articles including medallions and coins (excluding the coins of the nature of legal tender), whether plain or studded, containing gold of 8 carats and above;

 

 

(b)

Silver jewellery including partly processed jewellery and any articles including medallions and coins (excluding the coins of the nature of legal tender and any engineering goods) containing more than 50% silver by weight;

 

 

(c)

Platinum jewellery including partly processed jewellery and any articles including medallions and coins (excluding the coins of the nature of legal tender and any engineering goods) containing more than 50% platinum by weight.

 

 

 

 

Value Addition

8.17

The value addition will be as given in Handbook (Vol.1).

Wastage Norms

8.18

Under the schemes for gold/silver/platinum jewellery, the wastage or manufacturing loss shall be admissible as specified in the Handbook (Vol.1).

 

Export Against Supply by Foreign Buyer

8.19

Where export orders are placed on the nominated agencies/status holder, the foreign buyer may supply to the nominated agencies/ status holder, in advance and free of charge, gold/ silver/platinum, alloys, findings and mountings of gold/silver/platinum for manufacture and export. The exports may be made by the nominated agencies directly or through their associates or by the status holder as the case may be. The import and export of findings shall be on net to net basis.

The foreign buyer may also supply to the nominated agencies/ status holder in advance and free of charge plain semi- finished gold/ silver/ platinum jewellery for repairs / re-make and export subject to minimum value addition of 10%. However, if the so imported semi-finished gold/silver/platinum jewellery is exported as studded jewellery, value addition of 15% shall be achieved. In such cases of export, wastage of 2% may be permitted.

The procedures in this regard shall be as prescribed in the Handbook (Vol.1)

 

 

 

Export Through Exhibitions/

Export Promotion Tours/Export of Branded Jewellery

8.20

The nominated agencies and their associates, with the approval of Ministry of Commerce, and others, with the approval of Gem & Jewellery Export Promotion Council (GJEPC), may export gold/silver/platinum jewellery and articles thereof for holding/ participating in exhibitions abroad. Personal carriage of gold/silver/platinum jewellery, precious, semi-precious stones, beads and articles and export of branded jewellery is also permitted. These exports shall be subject to the conditions as given in the Handbook (Vol.1):

 

8.21

An EOU/EPZ/SEZ unit may also participate in exhibitions in India/abroad. The procedures for movement of the jewellery from these units and back shall be as prescribed by the customs authorities. In respect of such units, permission for holding/participating in exhibitions abroad may be granted by the concerned Development Commissioner.

Export Against Supply by Nominated Agencies

8.22

The exporter may obtain the gold/silver/platinum as an input for export products from nominated agencies in advance or as replenishment after exports in accordance with the procedures specified in this behalf.

 

 

 

Export Against Advance

8.23

An Advance Licence may be granted for the duty free import of:

Licence

 

(a)

Gold of fineness not less than 0.995 and mountings, sockets, frames and findings of 8 carats and above;

 

(b)

Silver of fineness not less than 0.995 and mountings, sockets, frames and findings containing more than 50% silver by weight;

 

 

(c)

Platinum of fineness not less than 0.900, mountings, sockets, frames and findings containing more than 50% platinum by weight.

 

8.24

Such licences shall carry an export obligation which will be required to be fulfilled in accordance with the procedures specified in this behalf.

 

8.25

The advance licence holder may obtain gold/silver/platinum from the nominated agencies in lieu of direct import in accordance with the procedures specified in this behalf.

Exports from EOUs/EPZ Units

8.26

The provisions in chapter 9 of the Policy will be applicable to gem and jewellery EOU and EPZ Units except for the provisions contained herein.

 

8.27

In the event of a unit ceasing its operation, gold and other precious metals, alloys, gem and other materials available for manufacture of jewellery, shall be handed over to an agency nominated by the Ministry of Commerce at the price to be determined by that agency.

 

8.28

These units may import their essential inputs for export production. They may also source gold/silver/platinum of fineness not less than 0.995/0.999/0.900 respectively through the nominated agencies.

(Notification No: 37 dated 11.10.2000)

 

8.28 A

EOU/EPZ units may import plain/studded gold, platinum and silver jewellery for repairs/re-make and export subject to a minimum NFEP of 7.5% in case of plain jewellery and 12.5% in case of studded jewellery. Such import and export shall be as per the procedures prescribed in the Handbook (Vol.1).

 

8.29

Deleted

 

8.30

Deleted

 

 

 

 

8.31

Jewellery samples allowed to be imported may be re-exported after proper identification.

 

8.32

Re-export of imported goods and export of domestically procured goods including goods generated out of the partial processing/ manufacture from such goods are permitted. Besides, supply of unsuitable/broken cut and polished diamonds, rough diamonds precious and semi-precious stones, upto 5% of the value of imported or indigenously procured goods to the DTA against the valid REP/Gem REP /Diamond Imprest Licences as applicable on payment of appropriate duty are also permitted.

 

8.33

Partly processed jewellery may also be exported subject to realisation of the prescribed minimum value addition.

 

 

8.34

EOU/EPZ units are allowed to receive plain gold/ silver/ platinum jewellery from DTA against exchange of gold/silver/platinum of the same purity and quantity in weight as that of the said jewellery. The DTA units supplying such jewellery, against exchange of gold/ silvery/ platinum shall not be entitled for deemed export benefits. The EOU/EPZ units shall not be eligible for wastage or manufacturing loss against such jewellery.

 

8.35

Samples made in wax models, silver models and rubber moulds may be exported under intimation to the Development Commissioner provided its value does not exceed Rs.1,00,000/- in a year. The value of samples so exported shall not be counted towards discharge of export obligation.

 

8.36

EOU/EPZ units are also permitted to sell 10% of value of exports of the preceding year to DTA. In respect of sales of plain jewellery, the recipient shall pay concessional rate of duty to the Customs in Indian rupees as applicable to sale from nominated agencies. In respect of studded jewellery, duty shall be payable in Indian rupees as notified by Customs. Such supply shall, however, be subject to the achievement of prescribed value addition.

Replenishment Licence

8.37

An exporter is eligible for freely transferable Replenishment (REP) Licence at the rate of 87% of the FOB value of exports of plain gold/ platinum jewellery and articles thereof, and 80% of the FOB value of export of studded gold/ platinum jewellery and articles thereof. Besides, the exporter will be eligible for freely transferable Replenishment (REP) Licence at the rate of 70% of the FOB value of exports of plain silver jewellery and articles thereof, and 65% of the FOB value of export of studded silver jewellery and articles thereof. Such REP licences are valid for import of items as given in Handbook (Vol.1).

Gem Replenishment Licence

8.38

Gem Replenishment (Gem REP) Licence may be issued under the schemes for export of gold/silver/platinum jewellery and articles thereof as given in paragraph 8.19, 8.20, 8.22 and 8.23 of the Policy. In the case of plain gold/silver/platinum jewellery and articles, the value of such licences shall be determined with reference to the realisation in excess of the prescribed minimum value addition. In the case of studded gold/ silver/ platinum jewellery and articles thereof, the value of Gem Replenishment Licence shall be determined by taking into account the value of studdings used in items exported, after accounting for the value addition on gold/ silver/ platinum including admissible wastage. Such Gem REP licences shall be freely transferable.

Gem REP Rate and Item

8.39

The scale of replenishment and the item of import will be as prescribed in the .

Personal Carriage of Export/ Import Parcels

 

8.40

 

Personal carriage of gems and jewellery export parcels by foreign bound passengers and personal carriage of gems & jewellery import parcels by an Indian importer/foreign national may be permitted as per the conditions given in Handbook (Vol.1).