BG for 5% of gold value (and not bond amount) obtained for nominated agencies - Customs - 003/98

Circular No. 3/98 dated 20/1/ 98 F.No. 305/92/97-FTT Government of India Ministry of Finance, Department of Revenue (Central Board of Excise Customs), New Delhi Subject : Import of Gold / Silver/ Platinum by the nominated agency for sale/ loan to jewellery exporter - Procedures Amendment of Bank Guarantee amount regarding. I am directed to refer to Board's Circular No. 27/ 97 dated 8th July, 1997 and Circular No. 48/97 dated 13th October, 1997 on the subject cited above. 2. The Gold Jewellery Exporters Association, New Delhi and the Ministry of Commerce have submitted that the exporters who are exporting Gem Jewellery under various schemes of the EXIM Policy and are getting duty free gold from the Nominated Agencies by furnishing a bank guarantee of 10% of the duty which is calculated @ tariff rate (72.5%) are facing financial difficulties. The reason advanced is that presently, the Nominated Agencies are supplying gold to the domestic market on payment of customs duty at the rate of Rs. 220/- per 10 gms which works out to about 4.5% to 5% of the value of the gold whereas the exporters are providing bank guarantee to the extent of 7.25% of the value of the gold. They have therefore requested to ameliorate the financial difficulty of the exporters. 3. The issue had been examined by the Board and it has been decided that, with immediate effect, the bonds executed by the Gem Jewellery exporters for taking duty free gold from the Nominated Agencies should be secured by a bank guarantee of 5% of the value of the gold (not bond amount as specified earlier). Accordingly, para 2(b) of the Circular No. 27/ 97 para 9 of the Circular No. 48/97 may be treated as modified to this extent. This may be given vide publicity by issue of a suitable public Notice.