Page 28 - Bullion World Volume 02 Issue 02 June 2022_Neat

Bullion World | Volume 2 | Issue 02 | June 2022

Points for Consideration effective duty under 7108. - Applicant should have an
1. Import of precious metal average annual turnover of Rs.
scrap under 7112 3. Imports under 7108 25 crores over the last three
On the day of signing the CEPA The process of applying for TRQs financial years.
with the UAE, the import of precious - The process is guided by - The turnover of Jewellery
metal scrap under chapter 7112 the Ministry of Finance manufacturers should either:
was under the "free category", (DOR) notification no. i) comprise of 90% of items
which meant anyone could import 22/2022-Customs dated 30 April manufactured/sold under HS
without applying for a license. The 2022 and amendments in Para code 7113, or
CEPA provided the duty elimination 2.107 of HOP and Appendix 2A ii) Comprise of items
immediately for this category, as of FTP issued by Department manufactured/sold under HS
against a duty of 12.5%; thus, of Commerce on 1 May 2022 code 7113, which is at least
the surge of precious metal scrap under which procedure of equal to the TRQ quantity
imports was likely from May 2022. allocation and imports under bid by the respective jewelry
However, 7112 was moved from TRQ under UAE CEPA is manufacturer (capped to the
"free" to "restricted" category" notified. maximum TRQ allocation
through an amendment in the - The TRQ applications can be permissible per annum) under
import policy. The notification was submitted online through the HS code 7113.
issued on 29 April 2022, just two DGFT website (https://dgft.gov.
days before the rollout of the UAE in) Import Management System - Applicant should have a GST
CEPA. This would mean, to import Tariff Rate Quota (TRQ)-find the number and have filed GST
any products under the 7112 HSN applicable HSN code, which is returns up to the preceding GST
Code one would need to apply for 71081200 for gold bars. return filing period.
an import license; this notification - The allocation will be based on - Financial statements containing
has effectively placed the precious the Indian financial year, which is the annual turnover of the
metals industrial scrap also on typically the period from 1 April eligible applicant should be duly
the Restricted List. However, as to 31 March certified/audited by a Chartered
mentioned earlier one could apply for - TRQ limit for Gold under tariff Accountant based on the
special import license. head 7108, the allocation shall jeweler's GST declarations.
be proportioned quarterly. - Import of gold dore shall not be
2. Import of jewellery under - TRQ application window considered under TRQ
7113 from next financial year (FY) - Gold TRQ imports under 7108
While the imports under 7113 fall onwards: – may be affected by the TRQ
under "free" category under the Q1 –1 January to 28 February holder through Nominated
Indian import policy, the same are Q2 – 1 May to 31 May Agencies as notified by RBI
governed by a Tariff Rate Quota Q3 – 1 August to 31 August (in case of banks), nominated
(TRQ) under the said Agreement Q4 – 1 November to 30 November agencies notified by DGFT, or
with 2100 Kg for the first year Qualified Jewellers as notified by
(and 2200, 2300, 2400, and 2500 For the current FY 2022-23, the International Financial Services
Kgs for the subsequent four years combined TRQs for Q1 and Q2 are Centres Authority (IFSCA).
respectively). The effective rate (as invited within the application window - TRQ license holders cannot
well as the standard rate) being of 5 May 2022 to 31 May 2022 carry over an allocation from one
20% at present, the reduced tariff TRQ allocation period to another,
concession of 1% each year shall - At the time of clearance of so any unused allocation shall
be progressively implemented over the import consignment, the be cancelled, implying that the
five years, viz., 19% for the first year importer in India must produce quantity for inviting TRQs for the
and 18, 17, 16, and 15% for the a Certificate of Origin issued next period will be increased by
subsequent four years respectively. by concerned authorities in the the quantity cancelled.
UAE. - The TRQ authorization shall
However, the risk of revenue contain the name and address of
leakage on imports under 7113 (all Conditions to be met: - the importer, Importer-Exporter
four entries) is negligible or even - The applicant must be a jewelry Code (IEC), Customs notification
absent for all practical purposes manufacturer. number, tariff item as applicable,
as in the first year, with a 19% - Applicant must be engaged in quantity and validity period of the
import duty (effective rate post the the business of goods falling certificate
tariff concession under the said under ITC(HS) codes 7108, - The TRQ authorization shall
Agreement) makes the said imports 7113, 7114, and 7118 in be issued electronically by the
non-lucrative in the light of the ~9% Chapter 71 of ITC(HS) DGFT and transmitted to Indian
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