CBEC issues Procedure to operationalize guidelines laid down by RBI for Import of Gold and Gold Dore Bars
AS per the instructions contained in Circulars No. 103, 107and 122 issued by the RBI, certain restrictions were imposed on the import of various forms of gold by nominated banks/nominated agencies/ premier or star trading houses/SEZ units/EoUs which have been permitted to import gold for use in the domestic sector. None of these restrictions was applicable to import of gold for the purpose of exports or to import of gold by units in SEZ exclusively for the purposes of exports.
Based on a review, the RBI had decided to rationalize the import of gold in any form/purity including import of gold coins/dore into the country. To activate this decision the extant instructions were withdrawn and new instructions were issued by the RBI vide Circular 15 dated July 22, 2013 which came into force with immediate effect.
Some of these instructions mandated the nominated banks/nominated agencies to -
+ retain 20 per cent of the imported quantity in the customs bonded warehouses.
+ undertake fresh imports of gold only after the exports have taken place to the extent of at least 75 per cent of gold remaining in the customs bonded warehouse.
It was also informed that the Government of India will be issuing separate instructions, if any, to the Customs authorities/DGFT to operationalize and monitor these import restrictions.
While reporting the above RBI Circular in DDT 2154, we had mentioned -
"Hope the instructions to the Customs authorities/DGFT are also issued in tandem lest they are caught unaware about the new regulations."
Thankfully, after issuance of this Circular 15 by the RBI, no instructions were issued by the CBEC. Thankfully, because the RBI came out with another Circular 25 dated August 14, 2013 informing that the GOI and the RBI have received several requests for clarification on the operational aspects of the scheme communicated vide RBI Circular 15 and, therefore, it has been decided to issue the fresh clarifications/modifications in supersession of all the earlier instructions. [See DDT 2170]
Some of the operational aspects mentioned were –
+ It shall be incumbent on all nominated banks/nominated agencies and other entities to ensure that at least one fifth, i.e., 20%, of every lot of import of gold imported to the country is exclusively made available for the purpose of exports and the balance for domestic use. A working example of the operations of the 20/80 scheme envisaged in terms of the present instructions is given in the Annex. This shall be monitored by customs authorities, and will be implemented port-wise only.
+ Any authorisation such as Advance Authorisation/Duty Free Import Authorization (DFIA) is to be utilised for import of gold meant for export purposes only and no diversion for domestic use shall be permitted.
The Circular which came into immediate effect also mentioned –
"5. Government of India will be issuing separate instructions, if any, to the customs authorities/DGFT to operationalise and monitor the above requirements for import of gold."
One would have hoped that the instructions to the Customs/DGFT formations would be issued immediately. But the word "immediately" means at a later date and, therefore, the Board took its own sweet time to frame the same. Probably, they were expecting a repeat of what happened to the earlier RBI Circular 15.
And so, the instruction, nay procedure to operationalise and monitor the requirements for import of Gold has finally been issued by the Board yesterday.
This Circular supersedes the Customs Circular no. dated 14.10.2009 insofar as the import of gold is concerned.
The Circular is meticulously crafted albeit lengthy and it would take an officer many man-hours to understand the intricacies of the same and at the same time maintain two Registers as prescribed in Annexure-I & II to the Circular.
The Circular also nonchalantly mentions –
6. ;This Circular shall be deemed to be modified as and when, and in the manner RBI issues any circular to amend the policy related to import of gold as contained in their circular dated 14.08.2013 as revised.
Circular dated September, 4, 2013.