The government has now permitted exporters of gold and silver jewellery to import the precious metal duty-free after selling it at international exhibitions, a move which would help in promoting the 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 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 the exported product.
The jewellery export body welcomes the resumption of this move. The hike in import duty of gold to 12.5 per cent in the budget has impacted the growth of the sector and the government’s decision to allow duty-free replenishment of raw material would boost re-exports, they claim.
Exporters have been demanding resumption of duty-free import facility for gold and silver for quite some time.
Earlier, duty-free replenishment was not available for jewellery sold at exhibitions abroad, which was a deterrent for exporters. They will now be able to import gold duty-free for the quantity sold abroad.
It may be noted that exports of gems and jewellery dipped 8.5 per cent during the April-July 2019 period to $9.7 billion. Gold jewellery exports declined 4.8 per cent during the period to $4 billion.