Thailand ready to foot duty on gold jewellery exports
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Thailand, eager to resume gold jewellery exports to India, has proposed that its exporters would pay import duty for "unstudded gold jewellery", foregoing the benefits of the free trade agreement (FTA) between the two countries.
The import of gold jewellery from Thailand has remained suspended since February this year after the commerce ministry had asked the department of revenue under the finance ministry to invoke a certain clause of the FTA, Early Harvest Scheme (EHS), following violation of the agreement by several traders.
"One of the proposals from Thailand is that their exporters will pay the existing 10 per cent import duty on unstudded jewellery. As regards studded gold jewellery (precious gems) if the value addition is not 20 per cent, they will pay the existing import duty on that too. They have suggested amending the early harvest scheme (EHS) for that," a finance ministry official said.
According to the FTA, jewellery exports from Thailand to India attract 1 per cent duty, though exporters have to add at least 20 per cent value to qualify for the place of origin condition.
Taking advantage of the agreement, several importers were using Thailand as a transit hub for gold though the country of origin was different, gaining the FTA benefit. The Directorate of Revenue Intelligence has raided several traders to stop violations of the agreement.
Embedded in the EHS is a provision that if there are doubts over certificates of origin issued by the exporting country, the importing country can suspend the trade of commodity until they are verified by the exporting country, in this case being Thailand.
However, the finance ministry official said that the authorities in Thailand are yet to submit the verified certificates and have sought more time on the grounds that these certificates run into thousands.