The India Bullion & Jewellers Association (IBJA) will appeal to the government to ban imports of gold coins and articles from countries with which New Delhi has signed free trade or comprehensive economic agreements (FTAs and CEAs) amid increasing shipments of such zeroduty items from South Korea.
Since GST subsumed excise and VAT on July 1 this year into a single producer tax, 11.5 tonnes of gold coins and jewellery worth about $400 million at zero duty have been imported from South Korea, with which India has a CEA, said Rajesh Khosla, director of IBJA. Because of the CEA, the government has foregone about $40 million in import levies.
"These imports are distorting the market, apart from causing a loss of revenue to the government," Khosla said. "IBJA will make a formal recommendation asking for banning imports of HS codes 7113, 7114 and 7118 from countries with which India has signed FTA or CEA."
The so-called harmonised system codes include gold coins, medal lions and arti cles like gold and silver jew ellery. HS codes haves been developed by the World Customs Organisation to categorise goods into various commodity groups.
Before GST kicked in on July 1, the government dealt with the issue of zero duty imports from South Korea or Indonesia by imposing an excise or countervailing duty of 12.5 per cent to level the playing field with domestic gold importers, who have to cough up 10 per cent import duty on bullion and 16 per cent on coins and ar ticles of gold.Under such agreements, duty cannot be changed unilaterally.
However, with GST subsuming excise within itself, the government cannot impose a CVD as it did in the past to level the playing field between parties importing from South Korea, and other gold importers and jewellery manufacturers. Trade sources in the know said the Ministry of Finance was looking into the matter.
The customs has now released a questionnaire that says imported gold consignments from South Korea would be cleared only after importers provide details on the manufacturer and pictures of the manufacturing facility. Sources said import of gold and articles from such countries cannot change form these cannot be melted into bars.
Source: Economictimes.indiatimes.com
