Indian Jeweller (IJ) Magazine August -September 2019

Policy & Market UPdate
Customs clarifies that gems and jewellery carried for
international exhibitions now exempted from IGST
Following the Ministry of Finance’s
announcement that no IGST will
be levied on gem and jewellery
carried outside the country for
exhibition purposes, Director (Customs)
has clarified regarding applicability of
relevant rules on goods, which were
exported earlier for exhibition purpose/
consignment basis.
Till now, gem & jewellery which was
being carried outside of the country even
for exhibition/ consignment purpose
was attracting IGST at re-import.
This comes into effect after several
representations made by the gem &
jewellery trade and industry body to the
Union Ministry of Finance, Department
of Revenue & Central Board of Indirect
Taxes & Customs for exemption of IGST
for the gems and jewellery carried for
exhibition purpose.
The statement from Director Customs
clarified that that the activity of sending
/ taking the goods out of India for
exhibition or on consignment basis for
export promotion do not constitute
as supply as the said activity does not
fall within the scope of section 7 of the
CGST Act as there is no consideration
at that point in time. Since such activity
is not a supply, the same cannot be
considered as “Zero Rated Supply” as
per the provisions contained in section
16 of the IGST Act. Also that there is no
requirement of filing any LUT/bond as
required under section 16 of IGST Act,
2017 for such activity of taking specified
goods out of India.
The Circular clarifies that since no
integrated tax was required to be paid
for specified goods at the time of taking
these out of India, the activity being
not a supply, hence the said condition
requiring payment of integrated tax
at the time of re-import of specified
goods in such cases is not applicable. It
is clarified that such re-import cannot
be taken to be falling under situation
at Sl. No. 1(d) of the said Notification.
Such cases will fall more appropriately
under residuary entry at Sl. No. 5 of the
said Notification even though those
specified goods were exported under
LUT, in view of the fact that the activity
of sending / taking specified goods out
of India is neither a supply nor a zero
rated supply.
record 37.9 tonnes of gold recovered from
scrap jewellery in april-June 2019
After a buoyant June quarter,
Indian consumers are now
staying away from fresh sale
of old or used gold and jewellery to
generate cash in July and August, due
to forecasts of a further rise in bullion
prices. Data compiled by the World
Gold Council (WGC), the global gold
miners’ body, estimated a record 37.9
tonnes of gold recovered from scrap
jewellery in April-June 2019 quarter,
up 18.4 per cent from 32 tonnes
reported in the corresponding period
last year.
Trading at Rs 31,648 per 10 grams
on April 1, 2019, standard gold price
spiked to touch Rs 33,500 per 10
grams towards the end of the June
quarter. Such a price level had not
been not seen in the past six years
and tempted consumers holding old
gold to encash it. The price further
jumped from the June-end level by 12
per cent to Rs 37,519 per 10 grams
on Wednesday, August 14.
“Indian consumers found a good
opportunity to sell their used
ornaments for cash in June quarter,”
Somasundaram P R, managing
director (India), WGC had said while
unveiling Gold Demand Trend data for
June quarter. Since then, gold started
moving up in the international market
following estimates of US Fed’s
interest rate cut, which weakened
dollar but strengthened bullion.
Analysts started forecasting robust
safe-haven buying in gold amid fears
of escalation in the ongoing trade
war between the United States and
China, and geo-political tensions in
West Asia following global economic
sanctions on Iran.
“There has been less consumer
turnout for sale of used jewellery
since July due primarily to hopes of
further price increase. Used jewellery
sales have declined by 50-60 per
cent in six weeks starting July 1,” said
Manoj Kumar Jha, Managing Director,
Kamakhya Jewels, a Mumbai-based
jewellery maker and retailer.
42 | august-september 2019 | INDIAN JEWELLER