The random testing of the jewellery export consignments shall be done at the time of export to ensure that they are fully in conformity with the declaration made to the customs, failing which penalties may be imposed on all beneficiaries; and under the relevant rules and after actual exports customs shall also authenticate the Passbook for effective exports.
Sources said that the FBR has issued instructions to the Collectors of Customs of Model Customs Collectors (MCCs) in this regard. According to details, the FBR has also directed the customs collectorates to implement Import and Export of Precious Metals Jewellery and Gemstones Order, 2013.
As per Order, the import of precious metals and gemstones under this Order shall be exempt from normal import tariffs and taxes. Import of other raw materials, tools, machinery and equipments actually required for production and export items shall also be exempt from normal import tariffs and taxes with prior authentication of Trade Development Authority of Pakistan. Furthermore, if an exporter uses duty-paid raw materials procured from the market, duty drawback-shall be admissible according to the standard-duty drawback system in force. Refund of sales tax, if paid on any raw material inputs, shall be allowed according to the Sales Tax Refund Rules in force for the time being.
The exporters of jewellery and gemstones shall be registered with Trade Development Authority of Pakistan as per procedure to be notified by Trade Development Authority of Pakistan. The import or export of precious metals, gemstones and jewellery made up of precious metals, gemstones or a combination thereof shall be allowed under the following schemes ie Entrustment Scheme and Self consignment Scheme, order said. The export of jewellery shall be allowed by air, parcel post, courier service and by sea, as accompanied or unaccompanied baggage. The export of jewellery shall be against advance payment, irrevocable letter of credit, delivery on payment or delivery on acceptance (DP/DA), or consignment basis including self-consignment.
The import of precious metals and export of Jewellery shall be allowed only after the quantities and values are-authenticated by Trade Development Authority of Pakistan in the Jewellery Passbook. All export proceeds under these schemes shall be realised within 120 days. The export of jewellery shall be made according to the usual Form-E procedure of the State Bank of Pakistan.
For jewellery studded or embedded with gemstones, the value of gemstones shall be shown separately in the export documents including Form E, clearly indicating therein the kind, value and weight of gemstones of each article, the order said. The import of precious metals and export of jewellery under this Order shall be restricted to the customs stations where the importer or exporter is registered with TDAP. The notified stations may include customs station at Karachi, Lahore, Islamabad and Peshawar.
The details of the Entrustment Scheme revealed that the scheme provides for export of jewellery and tides made thereof against imported precious metals supplied as partial advance payment, by the foreign buyer to the extent of the quantity of such precious metals to be used including wastage, in the manufacturer of the jewellery to be exported. The import and export under Entrustment Scheme shall be as per laid down conditions and procedure:
In case of import, an exporter shall apply as per prescribed form to the Trade Development Authority of Pakistan for authorisation to import precious metals. Trade Development Authority of Pakistan shall ensure that the contract signed by the supplier is notarised from the relevant foreign country's legal authorities, duly attested by the relevant Pakistan missions abroad. The contract shall contain inter-alia, all information as prescribed. The quantity of precious metals imported under this scheme shall be capped at 25 kgs on revolving basis and the precious metals imported under this scheme shall neither be sold in the domestic market nor used for any other purpose except to make and export jewellery to the supplier as per term and conditions of the contract Penalties under the prevalent laws shall be applicable in case of violation.
The order said that the exporters shall inform Trade Development Authority of Pakistan about precious metals imported against authorisation duly attested by the customs in the passbook within 21 days. The foreign buyer, exporter or authorised representative shall be allowed to send by air or sea cargo or bring precious metals into Pakistan personally. However, he shall inform the customs authorities about arrival of precious metals under Entrustment Scheme including the identity of the person bringing consignment, arrival details such as flight number, time, airport or seaport etc by which the consignment is scheduled to arrive and all other information.
On arrival at airport or seaport, the consignment shall be declared to customs authorities indicating there in the quantity and weight at the counter made for the incoming passengers with accompanied precious metals, the custom authorities shall provide preferred handling for both import and export and in the weightment of precious metals variation of 1 percent shall be allowed. The consignment of precious metals shall be cleared immediately after examination and verification of weight as per entitlement, under strict security and privacy. Relevant entries shall be recorded in the Jewellery Passbook by the customs authorities about such import clearance after fulfilling all legal requirements. In case such precious metals consignment cannot be released immediately for any reason, the same shall be deposited with custom authorities in safe custody against a receipt for release after completion of formalities and the exporter shall also be allowed, under the Entrustment Scheme to import jewellery for repair or remaking and re-export the same for which TDAP may give special authentication in the Jewellery Passbook.
In case of export, the TDAP shall authenticate in the Passbook and authorise export as per procedure. The exporter shall export eligible and authorised items within 120 days from the date of import of eligible and authorised items into Pakistan. Failure to export jewellery within the stipulated period shall be penalised under the relevant laws. The exporter shall inform Custom authorities in advance if the consignment would be carried as accompanied baggage and provide all required information as per Form. The export documents shall clearly indicate the type of eligible jewellery, whether bangles or chain, plain or studded or embedded and purity and carat of precious metals used in making the jewellery.
At the time of export the customs authorities shall verify the weight of precious metals as per exporter's declaration duly authenticated by TDAP in passbook, and shall asses the minimum value addition norms as specified in this order, it said. The random testing of the jewellery export consignments shall be done at the time of export to ensure that they are fully in conformity with the declaration made to the customs, failing which penalties may be imposed against all beneficiaries; and under the relevant rules and after actual exports customs shall also authenticate the Passbook for effected exports.
For the purpose of import of precious metals, the exporter shall deposit with his bank a cash margin equal to 1 percent of the value of precious metals to be imported and obtain from his bank a certificate as per Annex-G. The same shall be released or forfeited in the following manner:
The exporter shall within thirty days from the date of export, submit to the bank an application to release the 1 percent cash margin and attach TDAP Passbook and duly authenticated by-Customs authorities and the bank certificate in original evidencing that exports were effected. The Commercial banks shall forfeit the 1 percent cash margin in case exports proceeds are not realised within the time limit as prescribed in this Order and inform State Bank of Pakistan and Trade Development Authority of Pakistan, accordingly.
The details of the Self Consignment Scheme revealed that the export of jewellery made from locally procured precious metal and gemstones shall be allowed under this scheme as per the following procedure: The registered exporter shall apply as per prescribed application form to the Trade Development Authority of Pakistan for export authorisation and such application shall be checked and verified by the TDAP and the entries shall be made in the Jewellery Passbook. Customs checking, random sampling etc shall be same as in the entrustment scheme.
The sale proceeds shall be realised within 120 days from the date of export. The minimum 50 percent of the export proceed shall be realised in the form of foreign exchange through normal banking channel. The remaining 50 percent of the export proceed may be realised either in the form of foreign exchange or in the form of precious metals, authorisation of impart of such precious metals shall be authenticated in the Passbook by TDAP. The unsold jewellery or gemstones shall be deposited with the customs authorities and shall be cleared against relevant entries in Jewellery Passbook for import of unsold jewellery or gemstones against previous authorisation. The commercial banks shall ensure that sale proceeds of Jewellery and gemstones exported under this Order shall be repatriated in full within 120 days otherwise commercial banks shall inform State Bank of Pakistan as well as to TDAP.
In case of sale of Jewellery to foreign buyers and overseas Pakistan, the foreign nationals and overseas Pakistanis shall be allowed to take out personally precious metals jewellery or gemstones, as accompanied baggage, up to the limit of US $10,000, against foreign currency encashment certificate, with itemised purchased receipt.
For sale in international fairs and exhibitions, the exporters shall be allowed to take out precious metals jewellery and gemstones, for sale in international fair and exhibitions, on same terms and conditions as applicable for export of locally procured jewellery with the condition that 100 percent of export proceeds realisation shall be in form of foreign exchange from normal banking channels. If goods are to be taken for display only, one time permission for export cum re-import may be obtained from Trade Development Authority of Pakistan as per their exhibition procedure.
Export of precious metals jewellery shall be allowed with minimum value addition, ie, 8 percent on bangles and chains; 12 percent on other plain jewellery and 13 percent on studded or embedded jewellery. In case of mis-declaration or violation of any of the provisions of this Order, penalties shall be imposed under the Imports and Exports (Control) Act, 1950 and any other applicable laws for the time being in force, the order added.