Even as it is unlikely to relax gold import norms in the near future owing to persisting concerns...
Even as it is unlikely to relax gold import norms in the near future owing to persisting concerns on the current account deficit and trade deficit fronts, the government will soon bring out new guidelines to ensure timely availability of gold to micro and small enterprises making/selling gold jewellery.
This follows a court directive to the government after complaints from these firms that they are finding it difficult to get the yellow metal from banks and canalising agencies such as MMTC, STC and PEC.
The new guidelines will mandate greater transparency in gold sales of banks and canalising agencies, as well as simplification of auction and first-come-first-serve (FCFS) rules which are allegedly biased towards big units right now, according to official sources. The revenue ministry, following the Delhi High Court direction, had recently asked the Directorate General of Foreign Trade (DGFT) to consult stakeholders and streamline the guidelines by making it transparent, simple and uniform for all, the sources added.
Currently, banks and canalising agencies prefer big companies as they are interested in bulk sales rather than sales in small quantities, especially since there is huge demand for gold, the sources said.
In case of canalising agencies, they have an FCFS norm approved by their respective boards and which complies with Central Vigilance Commission norms. The sources, however, said the registration process of auction and FCFS is “cumbersome” and not online, adding that not only is the registration form difficult to obtain, but it also seeks many “unwanted” details, including location map of the firm just to delay the registration of small players.
“Many small players are already registered with other authorities, including the one on sales tax as well as with the Gems and Jewellery Exports Promotion Council, have an import export code as required by the DGFT and bank accounts. Instead of just taking copies of these documents, the canalising agencies through their opaque norms, keep asking for unnecessary details to ensure that small players are never able to take the benefit of the FCFS route,” an industry source said.