The Gem & Jewellery Export Promotion Council (GJEPC) held an Open House on “Gold Availability and Customs Procedural Issues” on October 20, 2018 in Mumbai.

Officials from various government authority bodies like DGFT and Customs and representatives of financial institutions came together with a number of industry members  to discuss some moot issues being faced by the gems and jewellery industry.

The officials attending the event included Nilkhil Chandra, Commissioner of Customs, Air Cargo; Akhilesh Kumar, Addl Commissioner; Ravinder Singh Bhati, Dy. Commissioner (Import), PCCCC; Bhramanand Prasad, Dy.  Commissioner (Export), PCCCC; and V. C. Chaturvedi  Jt. Director General of Foreign Trade. Also present were representatives of SBI Bank, ICICI, HDFC, Yes Bank, Nova Scotia, IndusInd Bank, and nominated agencies MMTC and DIL.

GJEPC Chairman Pramod Kumar Agrawal; GJEPC Vice-Chairman Colin Shah; Convener of GJEPC’s Jewellery Panel Committee, K. Srinivasan; and Executive Director (ED), GJEPC, Sabyasachi Ray, led the dialogue from the industry’s side.

The meeting opened with a brief address by GJEPC Chairman, who welcomed the dignitaries present and thanked them for their participation.

GJEPC’s Executive Director made a presentation which highlighted the growth and performance of Indian gem & jewellery sector; as well as outlined the major issues pertaining to gold availability and customs procedures.

The various issues outlined have been enumerated below.

1/  As related to nominated agencies/banks:

• Delay in refund process of margin money – Even after exporters submit all necessary documents, the margin money is not released.
• Non-availability of export gold – Difficulty in procuring duty free gold for export purposes, whereas domestic manufacturers are able to procure gold from the same source very easily.
• For new/small exporters, procuring duty free gold in multiples of 1 kg is very expensive -- suggestion for multiples of 100 gms.

2/ As related to Customs

• Bank Guarantee – Allowance of revolving Bank Guarantee
• Bond Cancellation – Continuing issue of non-discharge of bonds executed by the nominated agencies/banks to the customs department in the case of duty-free supply of precious metals gold/silver to the jewellery exporters.
• Difficulty in receiving OTC-Reg from Customs

3/ As related to DGFT

• Difficulties in online filling for status holder in DGFT Site.
• Online modification of IEC – who can directly interact to resolve the issue
• EPCG License cancellation issue

The Indian Bullion Bank Association Chairman also made a presentation.

The meeting was thereafter thrown open for members to participate for a Q/A session. 

With regard to members’ concerns on non-availability of gold for exports and the release of margin money by nominated agencies/banks, representatives of banks raised their concern that since five years the bond against the export gold has not been cancelled by the customs department, hence the banks are reluctant to supply export gold and unable to release gold margin money.

 With regard to this interaction, Nikhil Chandra remarked there were certain concerns of CAG, which have now   been resolved and the bond section has commenced action on cancellation of bonds. He also added around 20 crore bonds of SBI have been cancelled. He suggested that other banks should approach the customs department for the same.

A demand for Standard Guidelines to be followed by the customs personnel in order to avoid unwanted harassment to the industry was raised. Some members raised unresolved issues relating to gold replenishment. Others said that bank charges levied by different banks should have a glass ceiling.

The Customs Commissioner said he will look into these issues.

Industry members asked DGFT for SOP with regards to Advance Licence & EPCG Licence cancellation. Members also asked Akhilesh Kumar Addl. Commissioner, Customs to implement SOP i.e.  proper guidelines to be formulated for smooth functioning of import-export procedures for all gems & jewellery products, including the consignment imports which currently gives rise to several problems for every parcel, every time.

GJEPC Vice Chairman Colin Shah proposed the Vote of Thanks.

Participants generally agreed that the Open House had proved to be an ideal platform for members to interact with the different concerned authorities and to put various issues, which were proving to be hurdles, on the table.