The Reserve Bank of India (RBI) in its notification issued Monday stated that Special Economic Zones (SEZs), Export Oriented Units (EOUs) and premier trading houses in the country will be permitted to import gold exclusively for the purpose of exports alone. The new notification is intended to put an end to the diversion of imported gold towards domestic use.
The RBI also directed the banks that any authorization such as Advance Authorization (AA) / Duty Free Import Authorization (DFIA) have to be utilized for import of gold exclusively meant for export purposes only. The direction to the banks follows the increasing number of AA/DFIA related representations.
Exports towards fulfillment of obligation under AA/DFIA scheme shall not qualify as export for the purpose of the scheme of 20:80. The notification also clarifies that the condition of chaining imports to exports will not be applicable to AA/DFIA issued prior to August 14th.
According to the new notification, the entities in the SEZs, EOUs, Premier and Star trading houses shall not be permitted to clear imported gold for any purpose other than for exports, irrespective of whether they are nominated agencies or not.
To cut back gold demand in the country, the Indian government and the RBI had earlier linked the imports of gold to its exports. Nominated banks, agencies and entities were directed to ensure that one-fifth of every lot of imported gold into the country is exclusively made available for export purpose and the balance 80% may only be utilized for domestic use.
Source:resourceinvestor
Source:Bullion Bulletin