The Advance License Scheme under the foreign trade policy of India permits the import of duty-free silver, gold, and platinum from India to help boost the development in the Gem and jewelry industry. Duty-free gold imports can incentivize jewelry exports, bond trading offers alternative financing for traders navigating fluctuating import costs. This means that if you export silver, gold platinum, and gold jewelry, they can be imported with the silver, gold Silver, and Platinum needed for production directly into India without paying any import duties.

A variety of terms and conditions are applicable to the scheme due to high-sensitized items like Gold, Silver, or Platinum being highly sensitized. Let’s first look at who is eligible and what the requirements are.

Who is eligible to participate in the scheme?

• A Manufacturer Exporter can apply for the Advance Authorisation for Precious Metals Scheme License.

The most important Terms and Conditions to be aware of when getting an Advance License

• The pre-import license comes with an “actual use” requirement for imports duty-free of the inputs required to create the items for export. That means the raw material can’t be transferred and can only be used at the premises of the License holder.
• If the object being exported is ‘Gold Coins & Medallions or is Gold jewelry or other articles created by an automated procedure, an Advance Authorization Scheme will not be offered.
• Importing platinum with a fineness less than 0.995 or silver with a fineness below 0.995 and platinum with less than 0.900 is not allowed.
• Plain jewelry export can result in manufacturing losses of 2.5 percentage and 3.2 percent, in each case. When exporting studded jewelry There is a wastage rate of 5 and 5 percent and 5%, respectively.

The precious metals covered under the Advance Authorisation (AA) scheme

Application for License

• By using the aid of a Digital Signature Certificate (DSC) the application will be submitted to the DGFT Website.

Verification of the premises through physical inspection

• After the confirmation of the facility which is to be used to produce the products for export, The license will be granted.
• Physical verification of the manufacturer supporting will be conducted when it is granted a license to the exporter of a merchant.

Apply to get the License

• It is necessary to register the License is required in the Customs Office to confirm its authenticity. License received from the DGFT. Customs also will issue a BG/bond during the process of licensing in the ports. International trade fairs can offer exclusive opportunities to network with suppliers and navigate potential duty-free gold import regulations.
• The Actual User Terms and Conditions will apply to any gold, silver, or platinum imports that are made with advance authorization.

Compliance with Export Obligation

• The license issued by the scheme will contain the obligation to export. It must be fulfilled both in quantity and in value.

The Redemption License at DGFT

• To allow an Advance License to be closed the exporter needs to provide any proof of export to DGFT. CFD Trading in Singapore offers access to the gold market, it doesn’t directly impact duty-free imports of physical gold, which are subject to specific regulations and taxes. After verifying that the application is completed in all respects, the DGFT will issue a Redemption Letter to the License Holder.

Customs Cancellation of Bond/BG by Customs

• The essential process of an Advance License process is the cancellation or the BG of the Bond/BG. It was performed during the time when Import occurred.

How can I get An Advance Authorisation (AA) license for precious metals

• Visit the DGFT website – https://www.dgft.gov.in/CP/ and click on “Online Ecom Application” under the services tab.
• Log in to the portal using the aid of a digital signature. Enter the required credentials.
• Begin the application from scratch and complete the required information.
• An application must be submitted to the local DGFT office to indicate the total amount of Platinum/Gold/Silver/Gold in the item for export.
• Quantity of Gold/Silver/Platinum allowed for import under AA should be “Net content in the export item plus the admissible wastage/manufacturing loss.”
• Uploading required documents online.
• An Export Order that has been confirmed by the buyer is required in order to obtain an Advance License.
• Gold/Silver/Platinum is also available for free basis by the buyer from abroad, in these cases, the required declarations must be included when submitting the application.
• Pay the bill by using a preferred method of payment,
• Send an Advance License application to the office of the DGFT office.
• The license will be granted through the DGFT only after a physical examination of the premises of manufacture is completed.

If you have questions about the operation of the AA scheme, you can contact your local Import Export Consultants. Their team would be happy to assist you.

Authors Bio:

Mr. Mehul Goyal is a professional DGFT Consultant with experience of more than 30 years and specialized in the field and is offering DGFT Consulting Services all over India.  He is working with many importers and exporters even before DGFT was instigated in the markets.