Lok Sabha Question No. 2223 (UNSTARRED), answered on 2018-01-01
Subject: Import of Gold and Jewellery Articles
Ministry: COMMERCE AND INDUSTRY
Asked by: RAJIV PRATAP RUDY, GOPALAKRISHNAN CHINNARAJ

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 2223 TO BE ANSWERED ON 01 st  JANUARY,2018

## IMPORT OF GOLD AND JEWELLERY ARTICLES

## 2223.   SHRI RAJIV PRATAP RUDY: DR. C. GOPALAKRISHNAN:

Will  the  Minister  of COMMERCE & INDUSTRY ( वाǔणÏय  एवं  उƭोग  मंğी ) be pleased to state:

- (a) whether  the  Government  has  identified  certain  loopholes  in  India's  Free  Trade Agreement with South Korea and other countries which has resulted in sudden surge in imports of gold and other related articles;
- (b) if so, the details thereof along with the measures taken/being taken by the Government in this regard;
- (c) whether the Government has restricted imports of jewellery articles and other precious metals  from  some  countries  and  if  so,  the  details  thereof  and  the  reasons  therefor, country-wise;
- (d) whether the Government has issued new guidelines/directions that importers will have to obtain a license from the Directorate General of Foreign Trade for importing gold and silver from South Korea; and
- (e) if so, the details thereof along with the total volume of imports of gold and silver from South Korea during the last three years?

## ANSWER

okf.kT; ,oa m|ksx ea=ky; esa jkT; ea=h ¼Jh lh- vkj- pkS/kjh½

## 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 25 th 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.

## IMPORT FROM SOUTH KOREA

| HS CODE     | UNIT _QTY   | ITEM DESC                                                                 | 2014-15   | 2014-15   | 2015-16   | 2015-16   | 2016-17   | 2016-17   | 2017-18 (APR TO OCT)   | 2017-18 (APR TO OCT)   |
|-------------|-------------|---------------------------------------------------------------------------|-----------|-----------|-----------|-----------|-----------|-----------|------------------------|------------------------|
| HS CODE     | UNIT _QTY   | ITEM DESC                                                                 | 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)

## Annex