SCHEMES FOR EXPORTS OF GEMS AND JEWELLERY

Exporters of gems and jewellery import raw materials, which they make into ornaments for export. These raw materials are expensive and there is a way to procure these inputs duty-free. This is where the Schemes for Exports of Gems and Jewellery come into the picture.

Overview:

The Schemes for Exports of Gems and Jewellery provide their exporters with replenishment (REP) and diamond imprest licenses.

Benefits:

How do exporters benefit from these schemes?

The exporters benefits from the schemes in the following ways:

  1. Advance Procurement/Replenishment of Precious Metals from Nominated Agencies

An exporter of gold / silver / platinum jewellery, is allowed to obtain the same as an input for their export product from certain Nominated Agencies.

Nominated Agencies:

  • Nominated Agencies are MMTC Ltd, The Handicraft and Handlooms Exports Corporation of India Ltd, The State Trading Corporation of India Ltd, PEC Ltd, STCL Ltd, MSTC Ltd, and Diamond India Limited
  • Four Star Export House from Gems & Jewellery sector and Five Star Export House from any sector may be recognized as Nominated Agency by Regional Authority
  • A bank authorized by the Reserve Bank of India to serve as a Nominated Agency
  1. Replenishment Authorisation for Gems

This allows duty-free imports of gems. Listed below are the replenishment rates:

Gems Percentage of replenishment allowed
Cut and polished Emeralds/ Rubies/ Sapphires in Jewellery valued up to US$ 350 per carat fob. 60% for uncut and unset Emeralds Rubies/Sapphires
Cut and polished Emeralds/ Rubies/Sapphires in jewellery valued above US$ 350 per carat fob. 80% for uncut and unset Emeralds Rubies/Sapphires
All varieties of semi-precious stones and synthetic stones 50% on fob value of such stones
Pearls 60% on fob value of such pearls.
Plain Gold/Silver jewellery and articles 50%
Plain platinum jewellery and articles 50%

 

  1. Replenishment Authorisation for Consumables

Replenishment authorization allows for duty free import. Listed below are the replenishment rates:

Poly bag (as notified by Customs) for Jewellery made out of precious metals (other than Gold & Platinum) 2% of the FOB value of goods
Cut and Polished Diamonds and Jewellery made out of Gold and Platinum 1% of the FOB value of goods
Rhodium finished Silver jewellery 3% of the FOB value of goods

Eligibility Criteria:

What is the eligibility criteria for these schemes?

The following is the eligibility criteria for these schemes:

An exporter can apply for a license for import:

  • If the exporter has a minimum of three licensing years of export performance, equal to the best export performance of cut and polished diamonds in any licensing year
  • Against a valid export order in his own name
  • If an exporter of cut & polished diamonds, who is a status holder, is issued a license for import of cut & polished diamonds up to 5% of the export performance of the preceding year

Application:

How can an exporter apply for these schemes?

An exporter can apply for these schemes online by clicking here.

*Terms and conditions

The government has come up with these schemes in order to promote exports. Hence there is a need for an assurance that exporters would be exporting a higher value item for every import. The following is the minimum value addition stipulated:

Item of export Minimum value addition
Plain gold / platinum / silver jewellery and Articles and ornaments like Mangalsutra containing gold and black beads / imitation stones, except in studded form of jewellery 3%
All types of Studded gold / platinum / silver 5% Jewellery and articles thereof 5%
Any jewellery / articles manufactured by fully 1.5% mechanized process 1.5%
Gold / silver / platinum medallions & coins (excluding coins of nature of legal tender) 1.5%
Gold / silver / platinum findings / mountings manufactured by mechanized process 2.25%

For further details related to this scheme, click here.

EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME

Every businessman aims to introduce his products in foreign markets. For the products to meet international standards, businesses often have to import certain machinery. For this, the government has introduced the Export Promotion Capital Goods scheme, to be able to help such businesses bear the cost of machinery, customs duty, and other such perks.

Overview

The Export Promotion Capital Goods Scheme allows import of capital goods for pre-production, production, and post-production of products at zero customs duty.

Benefits

What benefits will a business avail from this scheme?

The benefits a business benefits will avail from this scheme are the permissions to:

  • Import machinery needed for their factory, minus the custom duty
  • Import capital goods such as computer software systems, spares, moulds, dies, jigs, fixtures, tools, refractories for initial lining and spare refractories, and catalysts for initial charge, plus one subsequent charge

Eligibility Criteria

Who are eligibility to apply for this scheme?

The following are eligible to apply for this scheme:

  • Manufacturer exporters with or without supporting manufacturers
  • Merchant exporters tied to supporting manufacturers and service providers
  • Service provider who is designated/certified as a common service provider (CSP) by the Directorate General of Foreign Trade (DGFT) Department of Commerce or State Industrial Infrastructural Corporation in a Town of Export Excellence

Application

How can a business apply for this scheme?

A business can apply for the EPGC license online by filling in the application here.

The steps to navigate through the site can be found here.

A business must file the application along with the necessary supporting documents with DGFT.

Documents Required

The complete list of documents needed to apply for this scheme can be found here.

Additional Information

Please take note of the information provided below:

  • Companies shall be subjected to export obligation (EO) equivalent to six times of duty saved on capital goods. This needs to be fulfilled in six years reckoned from date of issue of authorisation.
  • Authorisation shall be valid for 18 months from date of issue. Revalidation of EPCG authorisation is not permitted.
  • Second-hand capital goods shall not be permitted to be imported under this scheme.

Authorisation for import of the following capital goods (including captive plants and power generator sets of any kind) shall not be issued:

  • Export of electrical energy (power)
  • Supply of electrical energy (power) under deemed exports
  • Use of power (energy) in their own unit
  • Supply/export of electricity transmission services

For further information on this scheme, click here.