Govt probes Ďunusualí jump in gold jewellery exports

Jul 01 2014, 10:43 IST
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Government probes astonishing surge in gold jewellery exports from outside special economic zones. Government probes astonishing surge in gold jewellery exports from outside special economic zones.
SummaryConcern now is whether this rise in gold jewellery exports is genuine...

April-May 2014.

As against this curious trend, GJ exports from SEZs have always been performing better than such shipments from DTA. In 2012-13, GJ exports from SEZs clocked 9.55% growth over the previous year as against 5.06% growth by DTA GJ exports. The SEZ performance in 2011-12 was much better as against DTA with GJ exports from these enclaves recording a 35.3% growth year-on-year against just 4.64% growth by such exports from DTA. Similar was the trend in previous years too.

Last year, the government and the RBI had identified high gold imports as one of the main causes leading to widening of the current account deficit (CAD), and took steps, including hiking import duty on gold from 4% to 10% to curb its imports and contain CAD.

RBI norms in August 2013 said gold supply by nominated agencies to SEZ units, STH and PTH will not be treated as exports for the purpose of the 20/80 scheme.

In May 2013, the government had restricted gold trading from SEZs following complaints which alleged that some SEZs were diverting gold that is imported duty-free to the DTA and making huge profits due to the cost and duty arbitrage.

These factors meant that there was no real incentive for business persons to be in SEZs for exporting gold. As GJ exports from SEZs declined, the government in June 2013 said gold jewellery and ornaments can be exported from SEZs with a minimum value addition of 3%, while studded gold jewellery exports were allowed from these zones with a minimum value addition of 5%. Earlier, this value addition norm was applicable only to DTA units.

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