Government restores duty-free refueling facility for jewelry exporters
New Delhi, September 2 () The government has again allowed gold and silver jewelry exporters to replenish the precious metal duty-free after selling it at international exhibitions, a measure that would help promote the growth of the sector.
This tax-free replacement facility for precious metals stopped after the implementation of the goods and services tax (GST).
The General Directorate of Foreign Trade (DGFT) issued a notification on Monday by modifying a provision of the foreign trade policy (FTP) that had declared that the precious metal should not be replaced to the exporter or manufacturer where they are taking advantage of benefits with respect to the exported product.
An official of the Gem and Jewelery Export Promotion Council of India (GJEPC) said it is a welcome move as exporters demanded for a long time to resume the facilities.
It is the reintroduction of the gold and silver replacement scheme in goods exported/sold in exhibitions abroad, the official said.
He added that before, the tax-free replenishment was not available for jewelry sold at overseas exhibitions, so exporters were not selling, but now they will get tax-free gold for the amount sold abroad, which will boost exports
The Director General of the Federation of Export Organizations of India (FIEO), Ajay Sahai, said: It was a long-standing and logical demand, since the IGST (integrated goods and services tax) and ITC reimbursement (entry tax credit) provide reimbursement from the GST, while replenishment provides basic customs duty benefits. The two are mutually exclusive.
Exports of gems and jewels fell 8.5 percent during the period April-July 2019 to USD 9.7 billion.
Gold jewelry decreased 4.8 percent during the period to USD 4 billion. According to jewelry exporters, the increase in the gold import tariff to 12.5 percent in the budget has impacted the growth of the sector and allowing the duty-free replenishment would increase the availability of the precious metal. RR CS RR HRS