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Diamond, Gem & Jewellery Export Promotion Schemes
Diamond, Gem & Jewellery Export Promotion Schemes
8.1 Policy
The Policy relating to Replenishment (REP) Licence, Diamond Imprest Licence, Bulk Licence and Schemes for gold/ silver/platinum jewellery is given in chapter 8 of the Policy.
8.2 Replenishment Licence
An application for REP Licence may be made to the licensing authority concerned as given in Appendix-29 in the form given in Appendix-15A alongwith the documents prescribed therein.
8.3 The application shall be filed within six months following the month/quarter during which the export proceeds are realised. For export proceeds realised during the month/quarter, consolidated application for entire month/quarter shall be filed. However, if any supplementary application is to be filed, it may be accepted with a cut of 10% on entitlement. In case of third party exports, Replenishment benefit shall be admissible provided the EP copy of the Shipping Bill shows the names of both the manufacturer and the third party and REP licence against such exports is claimed by either of the parties after furnishing a disclaimer from the other party. REP licences will be transferable.
8.4 In case where part payment has been realised against an invoice, the application for REP licence may be made within six months following the month during which part payment was realised, provided;
(a) Not more than two such applications may be made for each such invoice; and
(b) The first such application shall be made only after 50% of the proceeds of the invoice is realised.
8.5 In case where payment is received in advance and exports take place subsequently, the application for REP licence shall be filed within six months following the month during which the exports are made.
8.6 For the purpose of clarity, it is again reiterated that the month in which the export has been made in the case of advance payment and the month in which export proceeds have been realised in part or full after making of the exports, shall be excluded while calculating the period of six months for the purpose of filing of application for REP licence.
8.7 The rate of entitlement will be with reference to the date of export.
8.8 The procedure laid down in paragraph 15.3 of this Handbook regarding issuance of split-up licences shall mutatis-mutandis to Replenishment Licences issued under this Chapter.
8.9 REP Licence Against Rough Diamonds
Export of rough diamonds is permissible of the imports made against relevant Bill of Entry for the purpose of replenishment benefit. This will be applicable for exports effected on or after 13th April,1998. For the purpose of claiming REP licence against such export of rough diamonds, the exporter shall furnish Bill of Entry in his own name for imports of rough diamonds . The licensing authority while issuing the REP licences, shall make suitable endorsement on the original Bill of Entry to avoid further use of the same Bill of Entry for claiming additional REP Licences.
8.10 REP Licences in Cases Where the Original Bank Certificate or Customs Attested Invoice or Shipping Bill is Lost.
An application for the grant of REP licence may be considered by the licensing authority concerned in cases where either the original Bank certificate of Export and Realisation or the original customs attested invoice or the shipping bill has been lost. Such application shall be accompanied by the following documents:
(i) A duplicate copy of the Bank Certificate of Export and Realisation in lieu of the original or a certificate from the Customs certifying that exports have, in fact been made in lieu of the customs attested invoice or the E.P Copy of the shipping bill, as the case may be;
(ii) An affidavit by the exporter about the loss of the Bank Certificate of Export and Realisation or the Customs attested copies of invoice or the E.P copy of the shipping bill as the case may be, with an undertaking to surrender the same to the licensing authority concerned, in case the same is subsequently found;
(iii) An Indemnity Bond from the exporter indemnifying the Government against loss, if any, in rupees which the Government may incur in such cases;
(iv) No REP licence shall be issued in cases where all the three documents in original, namely Bank certificate of export and Realisation, the Customs attested copy of invoice and EP copy of shipping bill are lost.
8.11 Diamond Imprest Licence
An application for Diamond Imprest licence may be made to the licensing authority concerned as given in Appendix-29 in the form given in Appendix-15B along with the documents prescribed therein. In addition, the exporter shall give:
(i) Declaration giving the name and address of his bankers;
(ii) Certificate from his bankers to the effect that realisation of export proceeds against exports made by the exporter are not outstanding for a period of more than six months.
8.12 Export Obligation
The Diamond Imprest Licence shall carry an export obligation fixed in the inverse ratio of 65% of replenishment, i.e, if the licence is issued for a cif value of US$65, the fob value of export obligation shall be US$100. At the time of redemption, the actual entitlement of the licencee shall be recalculated with reference to the replenishment rates admissible for the corresponding export products as given in Appendix-30A. Due to such re-calculation, if the entitlement of the licence holder comes to more than US$65 as in the above mentioned example, the licensing authority shall issue a REP Licence for a value equivalent to whatever is in excess of US$65 for import of rough diamonds. Diamond Imprest Licence for import of rough diamonds or the materials imported against this shall be freely transferable after the export obligation has been fulfilled. Holder of the Diamond Imprest Licence for import of cut & polished diamonds shall achieve a minimum value addition of 10%. While discharging export obligation, the quantity of cut & polished diamonds imported against such licence shall be accounted for in the caratage. Cut and polished diamonds exported for discharge of export obligation need not necessarily be the same cut and polished diamonds imported under this licence, as para 8.3 of the Policy permits mixing of these diamonds with other diamonds. The Holder of the Diamond Imprest Licence shall be eligible for import of cut & polished diamonds each not exceeding ¼ of a carat (25 cents) in weight. Such licences for the import of cut & polished diamonds/goods imported against such licence shall be subject to actual user condition and will not be transferable even after completion of exports. The entitlement of Diamond Imprest Licence for import of cut & polished diamonds shall be exhausted within the same year of its issuance and shall not be allowed to be carried forward to the next year..
8.13 Execution of BG/ LUT
Before clearance of the first consignment of import, the licensee shall execute with the licensing authority, Bank Guarantee (BG)/Legal Undertaking (LUT)/Joint LUT as the case may be. However, no BG/LUT/Joint LUT shall be required to be executed where the specified export obligation has been fulfilled before making any imports.
8.14 Legal Undertaking Limit
(i) The following table gives the LUT/Joint LUT limit for different categories of exporters;
| TYPE OF EXPORTER | LIMITS |
| Super Star Trading House and Units within the same group/ Public Sector Undertaking and units within the same group | Unlimited |
| Export House/ Trading House/ Star Trading house and units within the same group. | Upto five times of FOB value of exports effected in the preceding licensing year/current year |
| Exporters having performance of past export but not covered under Sl.No.1 and 2 above | Upto two times of FOB value of exports made during the preceding licensing year. |
| Any overseas Company with its branch office in India with an its Annual average turnover in Diamonds during preceding three Licensing years not less than Rs. 150 crores | Upto 50% of Annual average turnover of the Preceding three licensing years |
(iii) The applicant may submit the LUT alongwith the application itself which may be accepted and such an acceptance may be endorsed on the back of the licence.
(iv) For Diamond Imprest Licence also, a LUT on an annual basis shall be executed.
(v) The LUT/Joint LUT shall be executed in the form given in Appendix-24B.
8.15 Bank Guarantee
If the licensee does not have LUT limit, he shall be required to execute Bank Guarantee for 50% of the CIF value of the licence in the form given in Appendix-24A. 8.16 Appointment of Agents
The facility of appointment of agent(s) to operate Diamond Imprest Licences or for opening of letters of credit shall not be permitted.
8.16(A) Commission/ Brokerage/ Advance
The Diamond Imprest Licence holders are allowed to pay commission/brokerage charges upto 1.5% of CIF value of import provided there is a corresponding increase in the export obligation.
8.17 Further Licences
In respect of Diamond Imprest Licences issued on past export performance basis, subsequent applications for issuance of the licence may also be considered if 75% of export obligation fixed on the earlier licence has been fulfilled. In respect of Diamond Imprest Licence for import of cut & polished diamonds, subsequently one more application for issue of the licence may also be considered, if 75% of the export obligation on the earlier licence has been fulfilled. However, a licence in the next year will be issued only if 75% of the Export Obligation on the subsequent licence has been fulfilled.
8.18 Import From DTC
In case advance remittance to DTC has been effected against the Diamond Imprest Licence within the validity period of such licence and the import could not be effected within the validity period of this licence, then for the purpose of custom clearance such Diamond Imprest Licence shall stand automatically revalidated for a period of one month.
8.19 Extension of Export Obligation Period
The Licensing Authority may grant extension in export obligation period for a period of four months against one or more consignment / sight on payment of penalty of 1% on the unfulfilled FOB value of Export obligation with reference to CIF value of the imports made for which extension is being sought. Any request for extension beyond a period of four months can be considered only by a Committee headed by the Director General of Foreign Trade.
8.20 Regularisation of Bonafide Default
The cases of bonafide default in fulfillment of export obligation of not more than 5% by a Diamond Imprest Licence holder may be regularised if the licence holder pays to the licensing authority, a sum in Rupees which is equivalent to the shortfall in export obligation expressed in free foreign exchange. Alternatively, the Diamond Imprest Licence holder may surrender to the licensing authority REP licences of the product category at Sl.no. 2.1 to 2.5 of Appendix-30A of a value equivalent to twice the amount of shortfall in export obligation expressed in free foreign exchange.
8.21 Bulk Licence for Rough Diamonds
The following persons are eligible to apply for Bulk Licences: (a) M/s Hindustan Diamond Company Ltd (HDCL), Mumbai; (b) MMTC Ltd, New Delhi; (c) Exporter whose annual average FOB value of export of cut and polished diamonds during the preceding three licensing years has been not less than Rs. 75 crores; (d) Any overseas company with its branch office in India whose annual average turnover in diamonds during the preceding three licensing years is not less than Rs. 150 crores. An application for issue of a Bulk Licence may be made to the licensing authority concerned as given in Appendix-29 in the form given in Appendix-15C alongwith documents prescribed therein.
8.22 Entitlement
The value of Bulk Licence shall not exceed 50% of the annual average value of export of cut and polished diamonds made by the applicant during the preceding three licensing years. In the case of any overseas company with its branch office in India, the entitlement shall not exceed 50% of annual average turnover of the preceding three licensing years. However, for HDCL/MMTC the value of the bulk licence shall be 1.5 times of the total value of rough diamonds imported by them against the bulk license(s) in the preceding year.
8.23 Validity
The value of Bulk Licence shall be for a period of 12 months from the date of issue.
8.24 Procedure for Servicing Rough Diamonds Under Bulk Licence
The Bulk Licensee shall follow the procedure as given in Appendix-30C while servicing rough diamonds to the eligible persons.
8.25 Fulfillment of Obligation Under Bulk Licence
The Bulk Licensee shall furnish to the licensing authority, the proof of supplying rough diamonds to the REP/Diamond Imprest licensee and to the EOU/EPZ units within the prescribed period. The Bulk licensee shall submit the details of such supplies alongwith the original proforma signed by the licensing authority. The licensing authority shall compare such original with the proforma retained by it and thereafter redeem the case provided the Bulk licensee has supplied the rough diamonds upto the value of rough diamonds imported under the Bulk Licence. If the Bulk licensee fails to supply rough diamonds within the prescribed period, he shall surrender REP Licences of S.No. 2.1 to 2.6 of Appendix-30A for a value twice the value of such rough diamonds imported under the Bulk licence. Such licences shall have a minimum validity of three months on the date of surrender. Private/Public Bonded Warehouses shall follow the procedure as prescribed above for supplying rough diamonds to the REP/Gem/Diamond Imprest Licences and shall submit the details of such supplies to the Customs Authorities.
8.26 Further Bulk Licence
The Bulk licencee, may apply for issuance of further Bulk licence even before the expiry of the previous Bulk licence provided he submits the proof to the licensing authority of supplying rough diamonds to the extent of 75% of the value of the previous Bulk licence.
8.26(a) Diamond Dollar Account
The procedure of operating Diamond Dollar Accounts Scheme (DDAS) shall be as follows:
(a) All pre and post shipment credit facilities given by the banks in terms of Dollars to diamonds importers/exporters operating under DDAS shall be designated in Dollars and be reflected as borrowings in their DDAS. Export realisation as well as dollar realisation from local sale of rough/polished diamonds shall be credited immediately to such dollar accounts on receipt of the same.
(b) DDAS eligible firms and companies may be allowed to open a Diamond Dollar Account with their bankers. A maximum of two Diamond Dollar Accounts would be allowed with two separate banks.
(c) The sources of dollars in Dollar Accounts shall be (i) bank finance; (ii) export proceeds from shipments of polished/rough diamonds; and (iii) sale proceeds from local sales of polished/rough diamonds.
(d) An exporter/local seller of cut & polished diamonds operating under DDAS may apply for Replenishment licence to the Regional Licensing Authority (RLA) of DGFT in accordance with the para 8.2 of the Exim Policy and para 8.2 to 8.7 of Handbook (Vol.1). While making this application, the exporter will give an undertaking that the said application will operate under DDAS. Regional Licensing Authority shall calculate its entitlement as per Appendix 30A and issue Replenishment licence. However, Replenishment licence issued under DDAS shall be non transferable and this will be so specifically indicated by the Regional Licensing Authority. Regional Licensing Authority will make an endorsement on these Replenishment licences that payment for import against these licences shall be made from Diamond Dollar Account only. On receipt of payments against export/local sales, on the basis of self declaration indicating the value addition by the exporter/local seller, the bank will credit the value addition part to Rupee Account and balance to Diamond Dollar Account and issue a certificate. The exporter will produce such certificate(s) from the concerned bank as to the amounts credited to Diamond Dollar Account & Rupee Account to the RLA alongwith the Replenishment licence application. The RLA will issue the Replenishment licence after satisfying itself that all requirements have been met. While effecting import of rough diamonds, under DDAS, the exporter will make payments from DDA and will clear the consignment from Custom against these Replenishment licences issued under this scheme only. Such payments can be made in advance, whenever permitted, or after clearance of the parcel. Similarly, the exporter can buy rough diamonds from the local market from DDA holder on payment of dollars from DDA and debit of Replenishment licences issued under this scheme.
(e) In respect of local purchase of cut & polished diamonds, the buyer will pay to the seller the purchase value in dollars alongwith a disclaimer certificate with respect to the licence according to appendix 30A for the local purchases, on the basis of which the seller will apply to the office of the RLA for the Replenishment/Imprest obligation application as per Appendix 30A enclosing therewith the certificate from the bank, giving details of the value and invoice of cut and polished diamonds purchased by him locally. There shall not be more than one transaction of a particular sale/purchase before export and the seller/ exporter will give a self declaration to this effect. Exporter will make an application to the RLA on monthly basis based on the export realisations received less the disclaimer certificates for licences issued by him, if any, in accordance with Appendix 30A for the local purchase of cut & polished diamonds, the payments for which have been made from the Diamond Dollar Account.
(f) Bulk licences for rough diamonds may be issued as per paragraph 8.10 and 8.11 of Exim Policy and paragraph 8.21 to 8.26 of Handbook (Vol.1). A bulk licence holder, in addition to the present scheme, may also operate under Diamond Dollar Account Scheme, then while making the application, the applicant will specifically give a declaration to this effect to the RLA. RLA while issuing Bulk Licence will make an endorsement on this Bulk licence that payment for import of rough diamonds against this Bulk licence shall be made from Diamond Dollar Account only. This bulk licence holder can sell rough diamonds against production of valid Diamond Imprest Licence/Replenishment licence /Gem Replenishment licence to a buyer, who is operating under Diamond Dollar Account Scheme. Buyer will make payment for purchase of such rough diamonds in dollars from his Diamond Dollar Account . The bulk licencee shall follow the procedure as given in para 8.24 and 8.25 of Handbook (Vol.1). Bulk licencee will be able to import rough diamonds by making payment from his Diamond Dollar Account and will submit Bulk Licence issued under this scheme to Custom Authorities at the time of clearance. A bulk licence holder operating under DDAS is also permitted to sell to an exporter not operating under DDAS against valid Diamond Imprest Licence/Replenishment licence /Gem Replenishment licence but against payment in Dollar obtained from the bank by debiting exporter’s Exchange Control copy of the licence, and the payment so received shall be credited to the Diamond Dollar Account of the Bulk Licence holder.
(g) Diamond Imprest Licence may be issued as per para 8.3 to 8.5 of Exim Policy and para 8.11 to 8.20 of Handbook (Vol.1). In case the applicant wants to operate under Diamond Dollar Account Scheme, he will give a declaration to this effect to Regional Licensing Authority. RLA will issue Diamond Imprest Licence with a specific endorsement that this licence shall be operated under Diamond Dollar Account Scheme. The Licence holder will produce this licence before the concerned bank with whom Diamond Dollar Account has been opened who may permit remittance of dollars for purchase of rough diamonds, equivalent to CIF value of this licence. On receipt of payments against export/local sales, on the basis of self declaration indicating the value addition by exporter/local seller, the bank will credit the value addition part to Rupee Account and balance to Diamond Dollar Account and issue a certificate, the exporter will produce such certificate(s) from the concerned banks as to the amounts credited to Diamond Dollar Account and Rupee Account to the RLA at the time of application for redemption. The RLA will issue the redemption, additional entitlement, if any, after satisfying itself that all requirements have been met.
(h) Customs appraisal shall be applicable to physical imports/exports as at present and shall not apply to domestic sale/purchase of rough/polished diamonds.
(i) The procedure and documents for physical imports and exports shall remain unchanged for DDA holders including the requirement of Diamond Imprest Licence/ Rep Licence/Bulk Licence/Gem Rep Licence and replenishment norms, (Appendix 30A) prescribed in the Exim Policy. Other provisions of this chapter regarding Bulk licence and Diamond Imprest Licence like execution of Bank Guarantee/Legal Undertaking, time period for completion of export obligation, redemption of licence etc will be equally applicable to the licences issued under this scheme.
8.27 Loss of Gem and Jewellery
Consignments of gem and jewellery items exported out of the country and lost in transit after exports, where foreign exchange against such exports has been realised or insurance claims settled, will also be eligible for REP licence.
8.28 Wastage Norms
The wastage or manufacturing loss on gold/silver/platinum jewellery and articles thereof is as follows:
| Wastage Norms | ||
| Item of exports | Percentage of wastage by weight with reference to gold/ platinum/ silver content in the export item Gold/Platinum Silver | |
| a. | Plain jewellery and articles and ornaments like Mangalsutra containing gold and black beads/imitation stones, cubic zirconia etc. but excluding diamonds, precious, semi-precious stones. However, if the per gram value of the semi-precious stones utilised in the making of the jewellery/articles is less than the per gram value of gold/silver/platinum, the wastage norms of plain jewellery shall be applicable. | 3.5% 4.5% |
| b. | Studded jewellery other than those covered by (a) above and articles thereof | 9.0% 10% |
| c. | Mountings and findings manufactured indigeneously | 3.5% 4.5% |
| d. | Chains/Bangles manufactured by a fully mechanised process and unstudded. | 1.25% 1.25% |
| e. | Mountings, whether imported or indigenously procured/manufactured, used in the studded jewellery | 2.5% 2.5% |
| f. | Gold/ silver/ platinum medallions and coins (excluding the coins of the nature of the legal tender) | 0.25% 0.25% |
8.28 (A) Value Addition
The value addition will be calculated with reference to the value of gold/silver/ platinum content including admissible wastage. The minimum value addition shall be:
| S.NO. | ITEM OF EXPORT | MINIMUM VALUE ADDITION |
| a) | Studded gold/ platinum /silver Jewellery and articles thereof other than those covered by entry (b) below | 15% |
| b) | Plain gold/platinum /silver jewellery/ Articles and ornaments like Mangalsutra containing gold and black beads/ Imitation stones, cubic zirconia etc. only but excluding diamonds, precious & semi-precious stones. However, if the per gram value of the semi-precious stones utilised in the making of jewellery/articles is less than the per gram value of gold/silver/platinum, the value addition of only 10% as has been prescribed for plain jewellery shall be achieved. | 10% |
| c) | Gold/ platinum/ silver unstudded Chains and bangles manufactured by fully mechanised process | 3% |
| d) | Gold/ silver/ platinum medallions & Coins (excluding the coins of the nature of legal tender) | 3% |
8.29 The entitlement of quantity of gold/ silver/platinum against the export shall be the quantity of gold/silver/platinum in the item of export plus the admissible wastage/ manufacturing loss.
8.30 Gem Replenishment Licences
The Gem REP Licences shall be valid for import of rough diamonds, precious stones, semi-precious and synthetic stones and pearls. In addition, the licence shall also be valid for import of empty jewellery boxes upto 5% of the value of the licence within its overall cif value. The Gem REP licences issued against export of studded gold/silver/platinum jewellery articles, shall also be valid for import of cut and polished precious/semi-precious stones other than emerald upto 10% of the cif value of the licence within its overall cif value.
8.31 The Gem REP Licence are available as per the scale given in Appendix-30B. Such licences shall have a validity of 18 months from the date of issue.
8.32 Filing of Application
(i) An application for Gem Rep licence may be given to the licensing authority concerned as given in Appendix-29 in the form given in Appendix-15A alongwith the documents prescribed therein.
(ii) In case E.P Copy of the shipping bill and Customs attested invoice is submitted to the nominated agencies, the exporter shall furnish a self certified photo copy of the same along with a certificate from the nominated agencies certifying the carat/value of studdings in case of studded jewellery and excess the value addition achieved in the case of plain jewellery and articles.
(iii) The provision of paragraph 8.3 to 8.8 will also be applicable for Gem Rep licences.
8.33 Agency Commission
The exporter availing the scheme of gold/silver/platinum jewellery are allowed to pay agency commission. The value addition shall be calculated after deducting agency commission. Wherever such agency commission is paid, the value addition shall be correspondingly increased by the percentage of agency commission.
8.34 Endorsement on Shipping Bill and Invoice
At the time of export of jewellery, the shipping bill and the invoice presented to the customs authorities shall contain the description of the item, its purity, weight of gold/silver/platinum content, wastage claimed thereon, total weight of gold/silver/platinum content plus wastage claimed and its equivalent quantity in terms of 0.995/0.999 fineness for gold/ silver and in terms of 0.9999 fineness for platinum and its value, fob value of exports and value addition achieved. If the purity of gold/silver/platinum used is the same in respect of all or some of the items made out from each of these metals for export, the exporter may give the total weight of gold/silver/platinum and other details of such similar items which are of the same purity. In case of studded items, the shipping bill shall also contain the description, weight and value of the precious/ semi-precious stones/diamonds/ pearls used in manufacture, and the weight/value of any other precious metal used for alloying the gold/silver.
8.35 Conditions of Exports
The exports shall be allowed by the customs authorities provided the endorsement made on the shipping bill and the invoice are correct and the value addition achieved is not below the minimum prescribed in the Policy.
8.36 Proof of Exports
The exporter has to furnish the proof of exports, wherever required for export of gold/silver/platinum jewellery and articles thereof, by furnishing the following documents:
(a) E.P copy of the shipping bill;
(b) Customs attested invoice;
(c) Bank certificate of export in the form given in Appendix-25 showing that documents has been sent for negotiations/collections; and
(d)A declaration on the following lines: "I/We declare that outstanding realisation of export proceeds beyond 180 days does not exceed 10% of average exports of preceding three licensing years. I/We further declare that no export proceeds are outstanding beyond one year or such extended period for which RBI permission has been obtained."
In case of Personal carriage of jewellery by foreign buyer, the following documents should be submitted by the exporter/seller as proof of exports for claiming export entitlements:
(a) Copy of the shipping bill filed by the Indian Seller;
(b) A copy of the Currency Declaration Form filed by the Foreign Buyer with the Customs at the time of his arrival; and
(c) Foreign Exchange Encashment Certificate from the Bank. In addition to this, Personal Carriage on Documents Against Acceptance (DA)/ Cash On Delivery (COD) basis is also allowed. The exporter will have to furnish the following documents as proof of exports for claiming export entitlements: (i) Copy of Shipping Bill filed by the Indian Seller; and (ii) Bank Certificate of Export and Realisation
Instructions issued by the Customs Department in this regard should be followed mutatis mutandis.
8.37 Conversion of Purity/ Fineness
For conversion of quantity of gold/ silver/platinum in terms of equivalent quantity in terms of fineness, the following formula shall be used:
(i) Where items of gold has been exported in terms of carats, the quantity of gold shall be multiplied by the number of carat of gold exported, divided by 24 and thereafter again divided by 0.995/0.999/0.900 to arrive at the equivalent quantity of gold in terms of fineness of 0.995/0.999/0.900 respectively; and
(ii) Wherever the purity of the item of export is expressed in terms of fineness, the quantity of gold/silver/platinum shall be multiplied by the fineness of gold/silver/platinum exported and thereafter divided by 0.995/0.999/0.900 to arrive at the equivalent quantity of gold/ silver/platinum in terms of 0.995/0.999/0.900 fineness respectively.’.
8.38 Release of Gold/Silver/ Platinum by Nominated Agencies
The gold/silver/platinum shall be released to the exporter of jewellery by the nominated agencies/RBI authorised banks in multiples of 10 gms or in Ten Tola Bars in respect of gold. However, silver shall be released to the exporters in multiples of 1 Kg only. Any balance of gold/silver/platinum shall be available to the exporters along with his future entitlement. The gold/ silver shall be released by the nominated agencies in terms of 0.995/0.999 fineness and platinum in terms of 0.900 fineness.
8.39 Terms of payment
Export of gold/silver/platinum jewellery and articles thereof shall be against irrevocable letter of credit, payment of cash on delivery basis, Documents Against Acceptance (DA) basis or advance payment in foreign exchange.
8.40 Port of Export
Exports under the schemes of gold/silver/platinum jewellery and articles thereof shall be allowed by airfreight and Foreign Post Office through the Customs House at Mumbai, Calcutta, Chennai, Delhi, Jaipur, Bangalore, Kochi, Coimbatore, Ahmedabad, Dabolin Airport, Goa and Hyderabad. Export by courier shall also be allowed through Custom Houses at Mumbai, Calcutta, Chennai, Delhi, Jaipur, Bangalore, Ahmedabad and Hyderabad upto FOB value of Rs.20 lakhs per consignment.
8.41 Export by Post
In case of exports through Foreign Post Office which may include export via Speed Post through Foreign Post Office, the value of the jewellery parcels shall not exceed US$50000 and 20 kg. by weight. At the time of exports, the exporter shall submit the following documents:
(i) Shipping bills or invoice presented at the foreign Post Office;
(ii) Certificate from nominated agencies indicating the price at which gold/ silver/platinum was booked or given on outright sale basis or loan basis.
(iii) Three copies of invoice
8.42 Value Addition
Under the scheme for export of jewellery, the value addition shall be calculated with reference to the CIF value of gold/ silver/ platinum which shall be equivalent to the total outflow of foreign exchange on account of gold/silver/platinum content in the export product plus the admissible wastage. Wherever gold on loan basis has been given, the CIF value shall also include interest paid in free foreign exchange to the foreign supplier.
8.43 Export Against Supply By Foreign Buyer
Before clearance of each consignment of import supplied by the foreign buyer, the nominated agency shall execute a bond with the Customs, undertaking to export within the period stipulated in the contract, gold/silver/platinum jewellery or articles equivalent to the entire import quantity of gold/silver/platinum , mountings and findings etc excluding the admissible wastage. In case of direct supply of gold/silver/platinum, alloys, findings and mountings of gold/silver/platinum and plain semi-finished gold/silver/platinum jewellery to Status Holder, the Status Holder shall furnish a Bank Guarantee to the Customs equivalent to 1 ½ times of the Customs Duty leviable on imported gold/ silver/ platinum, alloys, findings and mountings of gold/silver/platinum and plain semi-finished gold/ silver/ platinum jewellery etc. The Bank Guarantee executed with the Customs shall be valid for one year. In case of direct supply to the Status Holder, exports shall be completed within 120 days. In case of non-fulfillment of export obligation/non-achievement of stipulated value addition, Customs Department shall proceed to recover custom duty alongwith interest which may include enforcement of Bank Guarantee. Besides the importer will be liable to penal action under the Customs Act.
8.44 The nominated agency/Status Holder shall be liable to pay customs duty leviable on that quantity which is proved to have been not exported.
8.45 The goods shall be cleared through Customs by the nominated agency Status Holder. Even where export order is received by an Associate, the goods shall be cleared through Customs by the nominated agency only and not the Associate. The associate shall, in such cases, authorise the nominated agency to act as its agent to file Bill of Entry and shipping bill.
8.46 At the time of export, the shipping bill presented to the Customs shall also contain the following:
(i) Name and address of the associate/Status Holder;
(ii) An endorsement by the nominated agency that the export is made against an order received by the concerned associate, its date of registration with the nominated agency. In case of exports by Status Holder, a Self Declaration shall be provided to this effect;
(iii) The name of the Customs House through which gold/silver/platinum/plain semi-finished gold/silver/ platinum jewellery was imported and the corresponding Bill of Entry No. and date and the date of import.
8.47 Each shipping bill shall be valid for exports only through the Customs House located at the place where the office of the nominated agency/Status Holder concerned is situated. It shall be valid for shipment for a period of seven days including the date on which the endorsement was made by the nominated agency in case of exports through nominated agency. If the exports cannot be made within this period, the exporter shall file a fresh shipping bill.
8.48 At the time of export, the exporter shall submit the following documents :
(i) shipping bill with two extra copies where exports are made from a Customs House other than the Customs House through which the corresponding import of gold/silver/platinum/plain semi-finished gold/silver/platinum jewellery was effected. In other cases, shipping bill with an extra copy;
(ii) Three copies of invoice;
(iii) Certificate from the nominated agency indicating the quantity and value of items supplied by the foreign buyer.*
8.49 The customs authorities shall return two copies of the shipping bill and the connected invoice duly attested. One copy shall be sent to the person who presented the documents and the other copy shall be sent by the Customs to the office of the nominated agency/Status Holder.
8.50 In case of exports through nominated agency, the exporter shall submit proof of exports to the nominated agency within 15 days of exports, who shall, after verifying the documents, release admissible quantity of the gold/silver/platinum etc. to the exporter.
8.51 The exporter may also obtain, in advance, gold/silver/platinum etc. supplied by the foreign buyer by furnishing a bank guarantee for an amount equal to the international price of such items plus customs duty payable thereon. The bank guarantee shall be redeemed only when the exporter has furnished proof of exports to the nominated agency and accounted for the use of items supplied in advance in the export product.
8.52 For the purpose of redemption of bond/Bank Guarantee executed with the Customs , the nominated agency/Status Holder shall furnish a statement indicating the items, its quantity and value supplied by the foreign buyer, the corresponding Bill of Entry number and date, number of each of the shipping bills against which corresponding exports was made.
8.53 Maintenance of Accounts The nominated agency shall maintain complete account, consignment-wise, of the gold, silver, platinum, mountings, findings/plain semi-finished gold/silver/platinum jewellery etc. imported for execution of each export order, the exports effected and the quantity of gold, silver, platinum mountings, findings etc. released against such exports. In case of direct exports, similar accounts shall also be maintained by the Status Holder. Such accounts shall be maintained for a minimum period of three years from the date of exports.
8.54 Export Through Exhibitions/ Export Promotion Tours/Export of Branded Jewellery The nominated agencies shall produce to the customs authorities letter in original or its certified copy, containing Government's approval for holding the exhibition./export of branded jewellery. Any other person shall produce to the Asst. Commissioner, customs the letter in original or its certified copy containing GJEPC's approval for holding the exhibitions/export promotion tour/export of branded jewellery.
8.55 Deleted
8.56 In case of re-import, such items, on arrival, shall be verified alongwith the export documents before clearance.
8.57 The exports under this scheme shall be subject to the following conditions:
(a) Items not sold abroad shall be re-imported within 60 days of the close of the exhibition. However in case the exporter is participating in more than one exhibition within 45 days of close of the first exhibition, then the 60 days shall be counted from the date of close of the last exhibition.
The gold/silver/ platinum content on items sold in such exhibitions may be imported as replenishment. The exporter shall take replenishment from the nominated agency within 120 days from the close of the exhibition gold/ silver/ platinum for the purpose of replenishment content against the items sold abroad in exhibition.
Personal carriage of gold/silver/ platinum jewellery, precious, semi-precious stones, beads and articles as samples upto US$ 100,000 for export promotion tours and temporary display/sale abroad is also permitted with the approval of Gem & Jewellery Export Promotion Council subject to the condition that the promoter would bring back the jewellery / goods or repatriate the sale proceeds within 45 days from the date of departure through normal banking channel. In case of personal carriage for export promotion tours, the exporter shall declare personal carriage of such samples to the Customs while leaving the country and obtain necessary endorsement on the Export Certificate issued by Jewellery Appraiser of the Customs. In such cases the exporter shall book with the nominated agency, within 120 days after the export promotion tour or the expiry of the stipulated period of 45 days, whichever is earlier, gold/silver/platinum for the purpose of replenishment content against the items sold abroad. Export of branded jewellery is also permitted with the approval of GJEPC for display/sale in the permitted shops set up abroad or in the showroom of their distributors/agents. Items not sold abroad within 180 days shall be re-imported within 45 days. The exporter shall book with the nominated agency within 120 days after the end of the stipulated period of 180 days, gold/silver/platinum for the purpose of replenishment content against the items sold abroad.
(b) The following documents shall be submitted for claiming such replenishment:
(i) Customs attested invoice;
(ii) Copy of the approval letter issued by the Government/ GJEPC;
(iii) Certificate from the nominated agency/ GJEPC in the form given in Appendix-15D.
(c) In case of exhibitions organised by the nominated agencies, the gold/silver/ platinum shall be imported as replenishment by the nominated agencies within 60 days from the close of the exhibition.
8.58 The nominated agencies shall maintain a complete account of the exports made, goods sold abroad, goods re-imported, and metals purchased abroad and imported into India. Such account shall be maintained for a minimum period of three years from the date of close of the exhibition.
8.59 Export Against Supply By Nominated Agencies
The exporter under the scheme may obtain gold/silver/platinum on following basis:
(i) Replenishment basis after completion of exports;
(ii) Outright purchase basis in advance;
(iii) Loan basis.
8.60 Replenishment Basis
The exporter may apply to the nominated agency for booking of precious metal gold/silver/platinum. The quantity of the precious metal booked with the nominated agency shall be equivalent to the precious metal content in the export product and the admissible wastage.
8.61 The applicant shall at the time of booking deposit an earnest money for a minimum amount of 20% of the notional price of the precious metal, which shall be adjusted at the time of actual sale.
8.62 The nominated agencies shall purchase the precious metal and thereafter issue a purchase certificate bearing a serial number to the exporter indicating the quantity of gold/silver/ platinum and the cif value, in dollars including the Rupee equivalent. The price shall be the actual price at which gold/silver/platinum is purchased by the nominated agencies plus permitted service charges but exclusive of Sales Tax. The service charges levied by the nominated agencies shall be included with the price of gold/silver/platinum for the purpose of value addition. The duplicate and triplicate copies of exporter's application together with copies of purchase certificate for the exporter shall be sent by the nominated agencies to the concerned Custom House.
8.63 The exports shall be effected within a period of 120 days from the date of booking and the drawal of the precious metal shall be completed within a period of 150 days from the date of booking or within 30 days from the date of export whichever is later.
8.64 Outright Purchase Basis in Advance The exporter may obtain the required quantity of precious metal in advance on outright purchase basis subject to furnishing of Bank Guarantee to the nominated agencies for an amount as may be prescribed by the nominated agency. On failure to effect exports within the period prescribed, the nominated agencies shall enforce the Bank Guarantee.
8.65 The exports shall be effected within a maximum period of 120 days from the date of outright purchase of the precious metal.
8.66 Loan Basis The exporter may obtain the required quantity of precious metal on loan basis subject to furnishing of Bank Guarantee to the nominated agencies for an amount as may be prescribed by the nominated agencies. On failure to effect exports within the period prescribed, the nominated agencies shall enforce the Bank Guarantee.
8.67 The exporter has to pay interest on gold taken on loan basis at the rate as may be specified.
8.68 No extension for fulfillment of export obligation shall be allowed.
8.69 The export has to be completed within a maximum period of 120 days from the date of release of gold on loan basis.
8.70 Exports Against Advance Licence
The procedure applicable to Advance Licences under chapter 7 of this Handbook shall apply to this scheme.
8.71 The export obligation will be required to be fulfilled within 120 days from the date of import of first consignment against the licence. The advance licence holder may import gold as replenishment after completion of exports.
8.72 The advance licence holder may obtain gold/silver/platinum from the nominated agencies in lieu of direct imports. In such a case, the nominated agency shall make, both the exchange control copy and customs purpose copy of the licence invalid for direct imports.
8.73 EOU/EPZ Scheme
Inter-unit transactions in gold and its products such as wires, rods, pipes, etc. within each EOU/EPZ shall be allowed subject to proper accounts being maintained by the units concerned as prescribed by the EOU/EPZ Administration from time to time.
8.74 Supplier of cut and polished diamonds, precious and semi-precious stones, synthetic stones and processed pearls from Domestic Tariff Area to the Units situated in EOU/EPZ shall be eligible for grant of Replenishment Licences at the rate and for the items mentioned in Appendix-30A. The procedure for submission of application for grant of Replenishment Licence as contained in paragraph 8.2 to 8.8 of this Handbook shall be applicable. However, the application shall be made to the Development Commissioner of the EOU/EPZ concerned. Such supplies to EOU/EPZ are not treated as deemed exports for the purpose of any of the deemed export benefits.
8.75 Units in EOU/EPZ/Agencies authorised by Ministry of Commerce and Industry shall be permitted to set up showrooms/retail outlets at the international airports, to start with in Delhi and Mumbai, for sale of plain and studded jewellery to foreign tourists in accordance with the procedure laid down by the Customs authorities and shall be subject to the following conditions :
(i) All jewellery items left unsold after a period of 60 days be exported abroad or returned back to the respective EOU/EPZ.
(ii) The minimum value addition as prescribed in the Policy shall be achieved.
8.76 CIF value of mountings, findings etc. may also be taken into account for value addition and their import/ export shall be on net to net basis. An exporter shall also be required to achieve an additional value addition of 5% over the value of cut and polished diamonds, precious and semi-precious stones, pearls and synthetic stones used as studdings over and above the value addition prescribed for the gold/silver /platinum content. The minimum value addition for units exporting loose cut and polished diamonds and precious and semi-precious stones shall be calculated on the basis of the corresponding replenishment rates available to such exports from DTA as given in Appendix 30-A of the Handbook (Vol- 1).
8.77 Scrap/dust/sweepings of gold may be sent to the Government of India Mint / Private Mint from the EOU/EPZ units and returned to them in standard gold bars in accordance with the procedure prescribed by the Customs authorities or may be permitted to be sold in the DTA on payment of applicable Customs duty, on the basis of gold content, as may be notified by Customs.
8.78 The EOU/EPZ units may obtain gold/silver/platinum from the nominated agencies either on outright purchase basis or on loan basis with the terms and conditions as given in paragraph 8.59 of this Handbook. The units have to fulfill the export obligation against such gold within a maximum period of 120 days from the date of release of gold on loan basis.
8.78A Repairs/ Remake of Imported Jewellery and It’s Export
EOU/EPZ units may import plain/Studded gold, platinum or silver jewellery for repairs/remaking. In such cases of export, wastage of 2% may be permitted. Export of jewellery must be effected within 120 days of import.
8.78B Consignment-wise Accounts Between Exports and Imports
For the purpose of monitoring, in case of gems & jewellery units at the time of scrutiny at any point of time, the unit shall be able to account for, by way of fulfillment of export obligation and realisation of prescribed NFEP, the entire quantity of imports as might have been made by the units. The exporter shall also account for the total quantity of imports by way of total quantity of exports and the balance stocks including broken diamonds and other gemstones. However, at no point of time, the unit shall be required to co-relate every export consignment with the corresponding import consignment.
8.79 REP Licence
The application for issue of Gold /Platinum/Silver Replenishment Licence may be made to the licensing authority concerned as given in Appendix-29 in the form given in Appendix-15A alongwith documents prescribed therein and in accordance with the procedure given in Paragraphs 8.2 to 8.8 of this Handbook. However, the applicant is required to furnish proof of exports in terms of paragraph 8.36.
8.80 For the purpose of calculation of entitlement of REP Licence, the international price as certified by SBI/MMTC shall alone be taken into account. At the time of exports, the exporter shall furnish to the customs, a certificate from SBI/MMTC regarding the international price of the gold/platinum/silver. The certificate issued by SBI/MMTC should not be older than 7 days. The international price shall also be indicated on the shipping bill and the invoice presented to the Customs.
8.81 Under the REP licence scheme, no wastage or manufacturing loss as given in the Handbook shall be allowed.
8.82 Replenishment (REP) Licence against export of plain Gold/Platinum /Silver jewellery and articles are valid for import of
(i) Gold of fineness not less than 0.995/ Platinum of 0.900 fineness /Silver of fineness not less than 0.999
(ii) Gold findings/mountings/solders upto 0.920 fineness upto 10% of the value of the licence within the overall value of the licence/platinum findings /mountings/solders upto 0.920 fineness upto 10% of the value of the licence within the overall of the licence/silver findings /mountings/solders upto 0.925 fineness upto 10% of the value of the licence within the overall value of the licence; and
(iii) Rough diamonds, rough coloured gemstones and real or cultured pearls undrilled/unset. However, import of rough diamonds against export of plain silver/platinum jewellery articles shall not be permitted.
8.83 At the time of export of studded gold /platinum/silver and articles the exporter shall furnish to the customs, a certificate from SBI/MMTC regarding the international price of the gold/platinum/silver. The international price shall be endorsed on the shipping bill and the invoice presented to the customs. Such certificate regarding international price of gold /platinum/silver issued by SBI/MMTC should not be older than 7 days.
8.84 The Replenishment (REP) Licence against export of studded gold/platinum/silver jewellery and articles are valid for import of:
(i) Gold/platinum /silver of fineness not less than 0.995/0.900/0.999, the value of which shall be determined by taking into account the equivalent quantity of gold/platinum /silver of 0.999/0.9999/ 0.999 fineness used in the gold/platinum/silver studded jewellery exported, as certified by the customs authorities multiplied by the international price of gold/platinum/silver of 0.999/0.9999/0.999 fineness as shown on the customs attested invoice plus 20% of the balance value of replenishment.
(ii) Gold/platinum findings/mountings/solders upto 0.920 fineness upto 10% of the value of the licence within the overall value of the licence; silver findings/mountings/solders upto 0.925 fineness upto 10% of the value of the licence within the overall value of the licence.
(iii) Rough diamonds, rough coloured gemstones and real or cultured pearls undrilled/unset. However, import of rough diamonds against export of studded silver/platinum jewellery and articles shall not be permitted.
8.84(A) No interchange of import shall be permitted for import of items against export of gold/silver/platinum jewellery and articles.
8.85 The REP Licence holder may obtain gold/platinum/silver from the nominated agencies. Before supply of gold/ platinum/ silver , the nominated agency shall make the REP Licence invalid for direct import.
8.86 Deleted
8.87 Regularistion of Bonafide Default
The cases of bonafide default in fulfillment of export obligation by an exporter who has obtained precious metals from the nominated agencies may be regularised provided the exporter has paid customs duty alongwith 24% interest thereon to the Customs. However, in the case of advance licence, the provisions as given in Chapter 7 of this Handbook shall apply. This shall be without prejudice to any action that may be taken against the exporter under the Foreign Trade (Development and Regulation) Act 1992, the Order or the Rules issued thereunder’.
8.88 Replenishment License for Import of Consumables
A Replenishment Licence for duty free import of consumables, equal to 1% of FOB value of exports of the preceding year may be issued on production of Chartered Accountant’s Certificate indicating the export performance and surrender of REP licence with a balance validity of minimum of three months issued under chapter 8. This licence shall be non-transferable and subject to actual user condition. This Replenishment Licence shall be valid for duty free import of consumables as notified by the Customs. A Replenishment Licence for import of plain/studded jewellery items equal to 2.5% of the FOB value of exports of preceding year may be issued on production of Chartered Accountant’s Certificate indicating the export performance. These imports shall be on payment of applicable duty. Application for import of consumables or import of plain/studded jewellery as given above may be made to the concerned Regional Licensing Authority in the form given in Appendix 15A.
8.89 Personal Carriage of Gems & Jewellery Export Parcels
Personal Carriage of gems & jewellery parcels by Foreign Bound Passengers from all EPZ units and all EOUs/DTA units located in Delhi, Mumbai, Calcutta and Chennai is permitted. The procedure for Personal Carriage of exports shall be as prescribed by Customs. The export proceeds shall, however, be realised through normal banking channel. For claiming the Replenishment in case of Personal Carriage of Exports by Foreign Bound passenger, documents shall be the same as mentioned under paragraph 8.36 of the Handbook (Vol.1). Authorised Courier companies are also permitted to operate on the above lines.
8.90 Personal Carriage of Gems & Jewellery Import Parcels
Personal carriage of gems & jewellery import parcels by an Indian Importer/Foreign National may be permitted into all EPZ units and all EOUs/DTA units located in Delhi, Mumbai, Calcutta and Chennai. The procedure will be the same as for import of goods by airfreight except that the parcels shall be brought to the Customs by the Importer/Foreign National for examination and release. The clearance of imports under this scheme shall be as per the normal licensing system of chapter 8 of the Policy.
