THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY
(SHRI C. R. CHAUDHARY)
(a) to (c): The gold jewellery / articles are classified under Exim codes 7113, 7114, 7115 and 7118. Under India – Korea Comprehensive Economic Partnership Agreement (CEPA), these items were kept in E-8 category in India''s schedule i.e. the tariff was to be reduced gradually and becoming zero with effect from 01.01.2017. The Rules of Origin criteria for these items under CEPA do not require any condition of minimum value addition by the exporting country.
Prior to Goods and Services Tax (GST) regime, there were certain safeguards such as Counter–vailing Duty (CVD) and Excise Duty. GST subsumed all other taxes with only 3% GST/IGST on gold and gold items. Therefore, in GST regime, traders using the India – Korea CEPA route are paying only 3% GST. Since MFN duty (basic customs duty from all other countries) on gold is 10%, they are getting an arbitrage of about 10% on gold items with nil Customs Duty on import from South Korea.
Considering the sudden surge in imports of gold articles from South Korea in July and August, 2017, the Government issued a Notification amending import policy of gold and silver to restricted category for imports from South Korea.
(d) & (e): The Government has imposed restrictions, with effect from 25th August, 2017, on import of gold and silver from South Korea, thus requiring an Authorisation from the Directorate General of Foreign Trade for importing such items from South Korea. No license has been issued so far for import of gold/silver from South Korea.
Total volume of imports of gold and silver from South Korea during the last three years is annexed.
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Annex
IMPORT FROM SOUTH KOREA
HS CODE UNIT
_QTY ITEM DESC 2014-15 2015-16 2016-17 2017-18 (APR TO OCT)
QTY VAL(US $) QTY VAL(US $) QTY VAL(US $) QTY VAL(US $)
71081200 KGS OTHER NON-MONETARY UNWROUGHT FORMS OF GOLD 35 1456789
71081300 KGS OTHR NON-MONETRY SEMI MNFCTRD FRMS OF GOLD 0 5360 0 8875 0 6024
71131110 KGS SILVER FILLIGREE WORK 24094 13847064
71131120 KGS SILVER JEWELLERY SET WITH GEMS 3 5487 28 22928 1 4053 0 1282
71131130 KGS OTHR ARTCLS OF SILVER JWELLERY 3 5116 2 2905 4057 2431356 3146 1859651
71131190 KGS PARTS 14 23566 14 32542 23 36296 13 17875
71131910 KGS JEWELLERY OF GOLD UNSET 24 771888 1134 42616641 10 407082 1370 56444540
71131920 KGS JEWELLERY OF GOLD SET WITH PEARLS 1 46678 0 2410
71131930 KGS JEWELLERY OF GOLD SET WITH DIAMOND 1 36416
71131960 KGS PARTS 1 55215 0 459
71131990 KGS ARTCLS OF OTHR PRCS METAL 16 576493 11 439979 2 102696 162 7026621
71141110 KGS MANUFACTURES OF SILVER 10 5798
71141910 KGS MANUFACTURES OF GOLD 655 28926674 31764 1347564571
71159010 KGS OTHER LABORATORY AND INDUSTRIAL ARTICLES OF PRECIOUS METAL OR ROLLED GOLD 1 1069 150 8260
71159090 KGS OTHR ARTCLS OF PRCS MTL/ROLLED GOLD 225 13002 110 10783 650 36013 101 19289
71189000 KGS OTHER COIN 1706 70457787
Grand Total 287 1492543 1300 43136181 31359 116315781 36591 1414393028
Note:1) figures for 2017-18 (Apr to Oct) is provisional.
2) No import under HS code 7109,7112 from South Korea has been recorded during last three years and2017-18 (Apr to Oct)
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