The government has allowed special economic zone (SEZ) units to export gold items after a minimum value addition of 3 per cent in gold jewellery and 5 per cent in gold and precious stone studded jewellery. Earlier, this provision was only applicable for gold units outside the special zones.
Earlier, in April, Commerce Ministry had banned SEZs for gold trading to check misuse of tax benefits by them as SEZs are allowed duty-free imports. It is reported that SEZ units were earning arbitrage profits as high as 7.5 per cent by diverting imported gold to the domestic market.
Commerce Secretary S R Rao said that the move would help in boosting India’s gold exports particularly jewellery as gold exports from SEZs in May declined by about $0.8 billion.
Presently, the government is worried over the high gold import, which has touched 162 tonnes in May, while in April, it was around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. High gold imports are also the main reasons behind high current account deficit and major fall in rupee value.
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