Regulatory environment pertaining to Import of Gold dore in India James Jose Secretary, Association of Gold Refineries & Mints

Transcription

1 Regulatory environment pertaining to Import of Gold dore in India James Jose Secretary, Association of Gold Refineries & Mints CGR Metalloys Pvt. Ltd., Cochin, India

2 1 Effective , Director general of foreign trade India shall issue license to import gold dore only for those refineries that hold a valid certification from Bureau of Indian standards (BIS) 2 These refineries must be accredited by NABL as per ISO/IEC 17025: 2005, prior to applying for BIS certification. 3 Refinery must be in the business of gold refining for the last one year as on date of applying to BIS. 2

3 (a) (b) (c) (d) The goods are directly shipped from the country in which they were produced and each bar has a weight of 5 kg. or above The goods are imported in accordance with the packing list issued by the mining company by whom they were produced The importer produces before the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, an assay certificate issued by the mining company or the laboratory attached to it, giving detailed precious metal content in the dore bar. The gold dore bars are imported by the actual user for the purpose of refining and manufacture of standard gold bars of purity 99.5% and above. 3

4 1 Setting up of an India good delivery standard and its regulatory mechanism to ensure certified and standardised bullion products, also ensuring responsible sourcing of gold. 2 Setting up of a bullion bank and bullion spot exchange to ensure transparent pricing and availability across the country. 3 Availability of world class certified reference materials for bullion analysis and certification. 4 Permitting dore importing gold refineries to export their bullion products, at net foreign exchange earnings (NFE). 5 Permitting Indian gold refineries to operate overseas metal accounts so as to avail metal financing in US dollars. 6 Permitting refinery friendly payment remittances for dore imports, similar to the payment mechanism for other raw materials. 4

5 1 To enable sourcing from Artisan & small scale mining companies, OECD guidelines for responsible gold, including guidelines for sourcing from licensed aggregators in the country of origin and the audit procedures contained therein, should be followed. 2 The fortnightly tariff value notified by Dept of revenue must apply uniformly to gold and to gold content in dore. (Dept of Revenue issues a tariff value for gold (bullion / articles thereof) every fortnight, which excludes dore. BCD is applied on gold and on for gold 9.35% on dore). 3 Dore import should be exempt from 3% IGST the same way banks / nominated agencies are exempt from 3% IGST at the time of gold import. 4 Small scale refineries may be allowed to exercise an option to endorse their import license in favour of a state owned nominated agency, thereby enabling clubbing of quantity and assuring financial credibility in dealings with mines. This may improve ability to enter into long term contracts with mining companies for small scale refineries. 5

6 1 Sampling and purity verification of gold content; There is no referral lab specified by the regulatory authorities. The 10 labs of the gold refineries approved by the Govt of India shall be notified for the purpose. The importer and the exporter shall agree in advance, before the shipment, samples shall be sent to any 2 of the above labs to determine its precious metal content. 2 The importing refinery is paying 10% BCD and 3% IGST to the Govt. for the declared gold content, based on the shippers assay certificate. The final payment with the shipper is settled based on verified gold content subsequently. There is no mechanism for adjusting the import duty paid on the gold content, in case the assay is found to be lower, which the supplier must be aware off. 3 Customs sampling for purity determination is not to be used as final payable gold content to the supplier, as the customs sampling is random and not after melting. The final payable gold content shall be based on the sampling and assay done at a mutually agreed lab. 4 Hand carriage of mined dore is not allowed. Hence smaller trial shipments for verification purposes is not possible. 5 All remittances are to be done through banking channels, however advance payment for dore is not permitted, which often create sourcing problems. 6

7 Fin. Year Dore import (gold content) Gold Bullion import (duty paid) Total duty paid Gold import Dore gold content as %age of total duty paid gold import (A) (B) C= (A+B) (A) / (C) % % % % % % (Apr-Nov) 8 months % Total imports from January to December 2017 = 946 tonnes. Including duty free imports for export purposes 7

8 Region Western Central Northern Southern Name of firm 1) GGC Gujrat Gold Centre Pvt Ltd., Ahmedabad 2) India Govt Mint, Mumbai 3) Shirpur Gold Refinery Ltd, Mumbai 4) Edelweiss Metals Ltd, Ahmedabad 1) MMTC Pamp India Pvt Ltd., New Delhi 2) Jalan and Company, New Delhi 1) Kundan Care products Ltd, Hardwar 1) Chemmanur Gold Refinery P Ltd., Cochin 2) CGR Metalloys Pvt.Ltd., Cochin 3) Bangalore Refinery P. Ltd., Bangalore 8

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