Circular No. 36 / 2002-Cus.
28th June, 2002
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Subject : Export Against Supply by Foreign Buyer- Clarification Regarding the Amount of Bank Guarantee to be Furnished under the Scheme.
I am directed to invite your attention to notification No.56/2000-Cus, dated 5.5.2000, which allows nominated agencies and status holder exporters etc. to import gold/silver/ platinum etc. without payment of duty under the scheme: “Export Against Supply by Foreign Buyer” for the purpose of manufacture of jewellery and export. The said notification provides, inter alia, that in the case of import by status holder exporters and exporters of three years standing, the importers are required to furnish a bank guarantee for a sum equivalent to one and half times the customs duty leviable on the goods being imported.
2. It has been brought to the notice of the Board by the Gem and Jewellery Export Promotion Council that the importers are being asked to furnish bank guarantee on the basis of tariff rate of duty applicable to gold, and not on the basis of effective rate of duty on gold when imported by nominated agencies. It has been pointed out that calculation of bank guarantee amount on the basis of tariff rate of duty adds to the transaction cost of exports and blocks huge funds. The Council has, therefore, requested that the bank guarantee should be worked out taking the duty on gold at the rate of Rs.250/- per 10gms i.e the rate of duty as applicable to nominated agencies under notification No.80/97-Cus. dated 21.10.97.
3. The matter has been examined. At present, the nominated agencies and authorised banks are allowed to import gold on payment of duty @ Rs.250/- per 10 gms under notification No.80/97-Cus. dated 21.10.97. It is noted that the bulk of the import of gold is through the nominated agencies and banks only. Therefore, to bring down the transaction cost of exports, it has been decided that for the purpose of calculation of bank guarantee amount in case of import of gold under the said Scheme, the duty rate on gold will be taken @ 250/- per 10 gms.
4. Wide publicity may be given by issue of a Public Notice in this regard.
5. Difficulties, if any, faced in the implementation of above instructions, may be brought to the notice of the Board at an early date
Kindly acknowledge receipt of this Circular.
Sr. Technical Officer (FTT)