ANNOUNCEMENT 13 May 2013In May 2013, the government of India announced a change in import formalities.
NUMBER OF INTERVENTIONS
Circular No. 103 - May 13
Circular No. 122 - June 4, 2013
Cirular No. 15 - July 22, 2013
Circular No. 25- August 14, 2013
Circular No. 82 - December 31, 2013
Circular No. 103 - February 14, 2014
Circular No. 42 - November 28, 2014
Circular No. 79 - February 18, 2015
On 13 May 2013, the RBI issued A.P (DIR Series) Circular No. 103 restricting the import of gold on consignment basis by nominated banks. Such imports on consignment can henceforth be used only to meet the requirements of exports and not for domestic use. Consignment imports are imported and held by the nominated banks/agencies and the domestic buyer or exporter can pay for and acquire the goods when required. This allows importing more than the required quantity of goods as no upfront payments are required from the buyer.
On 4 June 2013, the earlier restriction was extended to imports from all nominated agencies. Henceforth, all nominated banks and agencies can import gold on consignment basis only for export purposes. A further restriction required that Letters of Credit opened by these banks/agencies for gold imports will only be on 100% cash margin basis. Also, all gold imports will have to be on Documents against Payment (DP) basis and not on Document against Acceptance (DA) basis, except when gold is imported for export purposes.
On 22 July 2013, the RBI introduced the 20:80 restriction. This restriction requires that 20 percent of all gold imports in any form or purity must be made available exclusively for export purposes and must be stored in customs bonded warehouses. Further Imports of gold can be made only after at least 75 per cent of the gold lying in the warehouses has been exported and the imports will be in proportion of the earlier exports.
Furthermore, organizations located in the Special Economic Zones (SEZs) as well as Export oriented Units (EoUs), Premier and Star trading houses may import gold solely for the export purposes.
A notification on 14 August 2013 added several restrictions to the scheme. First, import of gold in forms of coins or medallions was prohibited. Further, gold for domestic use was made available by the nominated banks/agencies only against full upfront payment. The import quota for nominated agencies was also curtailed and conditions on what will be accounted as a usual and normal import quantity by these agencies was introduced along with a rule that limits the imports to the maximum imports in any one of the last three years
On 31 December 2013, the above restrictions were extended on import of gold dore by refineries. The restriction limits the import quantity based on license entitlements of the refineries and on the basis of the quantum of their exports.
On 14 February 2014, the 20:80 restriction was strengthened. The RBI has made an additional requirement that when imports are made for the third time, the permitted quantity will be either five times the export from previous imports or quantity permitted for import in the first and second instance, whichever is less.
As of 21 May 2014, Star and Premier Trading Houses were allowed to import gold under the 20:80 scheme. Earlier, these houses could only import gold for export purposes.
On 28 November 2014, the restrictions placed on gold imports including the 20:80 scheme were withdrawn.
On 18 February 2015, the RBI clarified that the 20:80 will still apply to gold imported before the scheme was withdrawn. Also, nominated banks are allowed to sell domestically gold imported on consignment basis, however such purchase will be against upfront payment only. Additionally, Star and Premier Trading Houses can import gold for domestic or export purposes but this is permitted on Document against Payment basis only. Lastly, the ban on import of coins and medallions was lifted.