The Director General of Foreign Trade has tightened norms for export houses to import gold in their capacities as nominated agencies. The public notice to this effect issued by the DGFT has said that for getting permission as a nominated agency for importing gold for domestic purpose, only exports from domestic tariff areas would be counted and such exports have much better vigilance mechanism.
At present apart from banks, MMTC and body like export promotion councils star and premium trading houses were allowed to import gold for domestic market. now import by star and premium trading houses will come down because the DGFT has said that for “the export performance of Gem and Jewellery items for Special economic zones and Export oriented units {SEZ/EOUs} will not be clubbed with export performance of Domestic tariff area (DTA) units for grant of nominated agency certificate.”
The public notice no. 37/2015-2020 dated 4 October was actually made available this week only.
A veteran trade analyst said that, “some leading export houses were allegedly incorrectly declaring gold jewellery exported from SEZ/EOUs to be of 22 carat jewellery while actually, they were exporting 18 carat jewellery thereby saving around 8 per cent of gold imported duty free in the name of exporting back and selling that gold in open market in India. Since DTA exports have tighter vigilance mechanism, such a practice will be arrested.”
Two third of gold a disadvantageous position was exported from SEZ/EOUs. Such practice was putting other nominated agencies like banks, MMTC etc at a disadvantageous positions especially in last six months when the market was quoting at a huge discount.
Harish Acharya, secretary, the Bullion Federation said that, “We had represented to the government to stop such a practices and the move is a part of best practices measures taken by the government in bullion business.”
In last several months, large part of gold was imported by the star and premium export houses, of which part of the gold was entering domestic market and since that gold was duty-free, saved by misdeclaring exports, was sold in the market at a discount.
The bullion industry official said that this will not restrict gold import needed for domestic market by banks and other agencies will get a level playing field.
Meanwhile gold price in Mumbai’s zaveri bazaar closed Rs 30,695 per 10 grm for 999 purity gold, Rs 245 higher from yesterday. The price went up Rs 800 higher than a fortnight ago.
Since gold price for gold sovereign bond issue that closed today is for 999 purity, today closing price is Rs 739 per 10 gram higher than the price at which bonds were sold by the government.
Gold prices were rising on higher possibilities of Trump winning US elections which is seen as a big positive for gold and currently gold is traded at $1297.5 per ounce.
Due to high international gold price, Indian market which was at a slight premium in last few days ahead of Diwali festivals demand went back to discount. According to NCDEX polled data gold was quoted at $3 discount today per ounce.
