Page 8 - Bullion World Volume 3 Issue 9 September 2023

Bullion World | Volume 3 | Issue 9 | September 2023

IGC 2023: Highlights Part 1

Norms and guidelines for Bullion

import from UAE through CEPA

Speakers: Mr Prem Nath, FinMet Pte. Ltd & Mr Ashok Gautam, IIBX IFSC

Mr Prem Nath, FinMet Pte. Ltd. Since April 2023, the eligibility
CEPA between India and UAE, valid conditions have been relaxed in April
for 10 years, was signed in March 2023 with an Indian entity having an
2022. Gold can be imported into IEC Code can apply for the allotment
India at a custom duty of 1% lower of TRQ for importing gold. The total
than the effective rate of duty. The annual quantity of TRQ to all eligible
Quantity of gold imports is under entities can be a maximum of 120
the Tariff Rate Quota (TRQ) system, tonnes for the first year starting with
where the eligible entities in India FY 2022-23, 140 tonnes for the
have to apply online to the DGFT for second year, i.e. FY 2023-24 and so
allotment of the quantity of gold to be on increased by 20 tonnes over the
imported under TRQ. preceding year in the third, fourth and
fifth year. So the total quantity of TRQ
Eligibility conditions were stringent of gold from the fifth to the tenth year
Mr Prem Nath at the beginning, where only those would be capped at 200 tonnes.
entities who were in the gold jewellery
business with some stipulated The IGCRS rules for the import of
minimum average annual sale gold into India and the challenges
turnover during the last three years faced are mentioned in the tables
could be eligible below:-

IGCRS Rules:-
1. Import of Goods at Concessional Rate of Duty or for Specified End Use Rules 2022 have been notified vide
Custom Notification (NT) No. 74/2022 dated 9th September 2022.
2. In this notification, the definition of Job Work excludes gold, jewellery and articles thereof, and other precious
metals or stones vide para 3(g) of this Notification.
3. CBIC issued a clarification to the above Notification of 9th September 2022 in its Custom Circular No. 18/2022
dated 10th September 2022 in which clarification about job work vide para no. 4.2(f) is as follows :
4. Para 4.2(f): The restrictions on job work are only relating to the case where it is undertaken on the goods
belonging to the importer and does not apply to the end-use recipient who receives the goods on the supply and
deals with it as stipulated in the notification.

Challenges:-
1. TRQ holders taking supply of gold from Nominated Agencies can use the gold for manufacturing of jewellery on
job work basis as per IGCRS Rules 2022. But the QJs importing gold against TRQs in their own name through
IIBX must be manufacturers themselves as job work is restricted for them in IGCRS Rules.
2. There has to be a level playing field for those importing TRQ gold through IIBX also.
3. Low utilization of TRQs allotted last year
4. TRQ holders taking supply from Nominated Agencies have to submit a custom duty margin of 1% to the
Nominated Agencies.
5. Nominated Agencies have to submit a custom duty bond to the Customs Authorities to the extent of 1% for the
import of gold under TRQs of CEPA with UAE.

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