Reimport of Diamonds - Customs Exemption - CBEC ratifies DGFT
BASIC Customs Duty of 2% on import of cut & polished diamonds has been imposed by the Department of Revenue with effect from 16.1.2012 vide Notification No. 01/2012.
By DGFT Notification No. 100 (RE-2010) /2009-2014, dated February 28, 2012 , it was stipulated that such duty will not be applicable on re-import of cut & polished diamonds (each of 0.25 carat or more) sent for certification/ grading abroad to the authorised laboratories. (Earlier also similar provision existed in FTP which was deleted after the Basic Customs Duty on cut and polished diamonds was brought down to zero.)
While reporting this in DDT 1805 - 29.02.2012, we asked, But can customs duty be exempted by a notification issued by the DGFT; shouldn't there be a Customs Notification?
The Customs Notification has now been issued. The Notification exempts cut and polished diamonds falling within chapter 71 when re-imported into India after certification/grading by the laboratories / agencies as notified in the Foreign Trade Policy in this regard, from the whole of the duty of customs, subject to fulfillment of the following conditions:-
Cut and polished diamonds:
1. are re-imported by gems and jewellery exporters having a track record of at least three years and having an annual average turnover of five crore rupees and above during the preceding three licensing years; Each piece of cut & polished diamonds so re-imported shall not be less than 0.25 of a carat in weight;
2. shall be re-imported within a period of three months from the date of exportation;
3. shall be allowed to be re-imported only on production of certification/grading report from the said laboratories or agencies; and
4. so re-imported shall match with corresponding diamonds mentioned in the invoice at the time of exportation in terms of value, height, circumference and weight.
But why was this notification was not issued on February 28, when the DGFT announced that no Customs duty need be paid.