TEJINDER NARANG
SIMPLIFIED PROCEDURE FOR GOLD IMPORT AND 20% MANDATORY EXPORT
Please click on the following link to read :
http://epaper.
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SIMPLIFIED PROCEDURE FOR GOLD IMPORT AND 20% MANDATORY EXPORT
Around 4th
September 2013, in a more than 40-clause document, Indian customs department laid
out details for authorised importers for ensuring 20% gold (jewellery exports),
bonds to be given by importers over duty payments and "surprise audit or
checks" by custom officers to ensure compliance
Considering
that—Gold is asset of its own class with countercyclical safety and has many
ceremonial priorities in Indian context, administered tariff and advance export
of jewellery requirements will be cumbersome and counterproductive.
Indian Gold
import can be harmonised by disengaging nominated agencies and simplifying the procedures,
wherein “20% advance FX earning of any commodity” shipped out by any exporter can
be bought by a bullion importer by purchasing the Bank Realization Certificate
(BRC) at a market determined premium. Private trade may be allowed to open
letter of credits on LBMA (London Bullion Metal Association) approved
members/associates/sellers for bullion import. For greater clarity--
1
Banks can be
asked to issue Bank Realization Certificate (BRC) in two parts—say 20% and 80%
to all Indian exporters of “any” commodity in twin copies—one
for exchange control and others for custom controls.(BRC-is a documentary receipt issued to an Indian exporter by an authorized bank after realization of invoiced exports proceeds from LC opening bank.)
2
Any Indian exporter
has the discretion to trade (sell) 20% BRC to a bullion importer at a market
determined premium by endorsement. (20% foreign exchange earnings will
be indirectly “taxed premium” as per supply/demand intensity for bullion
importers.)
3
Import LC for bullion import can be established by the bank upon
surrender of the 20% BRC by bullion importer. Custom copy of BRC can be
submitted at the time of clearance from airport.
ADVANTAGES
Market
premium will bring equilibrium in direct and indirect imports. Additional
exports of other commodities will be
incentivised by premium earned on BRC. Bullion import will be undertaken after
prior realization of 20% foreign exchange. Custom formalities, bonds/bank
guarantees, special audits on delayed or
deferred payments, ensuring advance exports etc. will be dispensed. Parallel
and grey market will be minimal.
PLEASE ALSO SEE MY ARTICLE IN BUSINESS LINE 27.9.2013
Please click on the following link to read :
http://epaper.
SEE CHARTS---1)TOP 20 REPORTED OFFICIAL GOLD HOLDINGS (JUNE 2013) (IMF, WORLD GOLD COUNCIL).
2) ANNUALIZED RETURNS FOR ALTERNATIVE RESERVE ASSETS
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