Worried over the possibility of India imposing restrictions on import of gold jewellery, Thailand on Wednesday mooted a proposal under which its exporter would forego the duty benefit under the Indo-Thailand FTA and pay full duty.
New Delhi: Worried over the possibility of India imposing restrictions on import of gold jewellery, Thailand on Wednesday mooted a proposal under which its exporter would forego the duty benefit under the Indo-Thailand FTA and pay full duty.
The issue was discussed during the meeting of Commerce & Industry Minister Anand Sharma and Thai Dy PM and Minister for Commerce Niwattumrong Boonsongpaisan here.
"We have proposed that ... The exporters from Thailand and also importers in India agree that now we will pay tax on the gold (including gold jewellery) and things like that," Niwattumrong told reporters after the meeting.
In March, the Commerce and Industry Ministry had advised the Revenue Department to suspend preferential import of gold jewellery from Thailand.
"Department of Revenue has been advised to suspend preferential import of gold jewellery with identified tariff lines from Thailand till the retroactive check is conducted by the Thai side," Minister of State for Commerce and Industry D Purandeshwari had said in a written reply to the Rajya Sabha.
This suggestion came in the wake of doubts raised over the accuracy of information given on the Certificates of Origin issued by Thailand under the Early Harvest Scheme (a kind of free trade agreement).
Niwattumrong said that Thailand's exports of gold to India is only 3 percent of total imports of India.
He added that rest of things in the scheme would not be changed.
"This is a private sector agreement. The FTA is still there. But in practice...Exporters and importers agree so that we solve the problem," he added.
The FTA with Thailand allows gold jewellery imports at a concessional customs duty of 1 percent. This concessional rates make gold imports attractive, especially when considering that the duty for importing standard gold bars, gold coins and non-standard gold stand at up to 10 percent.
The Department of Revenue Intelligence (DRI) had alleged that some traders were bypassing rules of origin norms to import gold under the FTA with Thailand.
Under the rules of origin norms, a trader can import gold from Thailand if the value addition is 20 percent. If strictly followed, sources said, the import of gold jewellery from Thailand should become less attractive as prices of gold in India and Thailand are the same.
India, a big consumer of gold, has imposed restrictions on gold import due to rising current account deficit.
In April-December 2012 gold imports stood at USD 38 billion, as against USD 56.5 billion in the full 2011-12 fiscal.