import of gold by a pvt. ltd. company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 July 2011 One of the pvt ltd company used to give gold coins of 100gms and 10gms to its dealers & distributors under Sales Discount Scheme. Can a pvt ltd company import gold into india for distributing it under sales discount scheme. Gold coins were distributed every year to their dealers.
what could be the better solution
please help me

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
Follow

26 July 2011 Gold may be imported by the nominated agencies/banks on consignment basis where the ownership will remain with the supplier and the importer (consignee) will be acting as an agent of the supplier (consignor). Remittances towards the cost of import shall be made as and when sales take place and in terms of the provisions of agreement entered into between the overseas supplier and nominated agency/bank.

also noted that:-

Direct Import of Gold

AD Category – I bank can open Letters of Credit and allow remittances on behalf of EOUs, units in SEZs in the Gem & Jewellery sector and the nominated agencies / banks, for direct import of gold, subject to the following

(i) The import of gold should be strictly in accordance with the Foreign Trade Policy.

(ii) Suppliers’ and Buyers’ Credit, including the usance period of LCs opened for direct import of gold, should not exceed 90 days.

(iii) Banker's prudence should be strictly exercised for all transactions pertaining to import of gold. AD Category – I bank should ensure that due diligence is undertaken and all Know Your Customer (KYC) norms and the Anti-Money-Laundering guidelines, issued by Reserve Bank from time to time are adhered to while undertaking such transactions. AD Category – I bank should closely monitor such transactions. Any large or abnormal increase in the volume of business of the importer should be closely examined to ensure that the transactions are bonafide trade transactions.

(iv) In addition to carrying out the normal due diligence exercise, the credentials of the supplier should also be ascertained before opening the LCs. The financial standing, line of business and the net worth of the importer customer should be commensurate with the volume of business turnover. Apart from the above, in case of such transactions banks should also make discreet enquiries from other banks to assess the actual position. Further, in order to establish audit trail of import/export transactions, all documents pertaining to such transactions must be preserved for at least five years.

(v) AD Category – I bank should follow up submission of the Bill of Entry by the importers as stipulated.

(vi) Head Offices/International Banking Divisions of AD Category – I banks undertaking gold import transactions are required to submit as per the format enclosed at Annex-3, a monthly statement thereof, to the Chief General Manager, Trade Division, Foreign Exchange Department, Amar Building, Central Office, Reserve Bank of India, Sir P.M. Road, Fort, Mumbai 400001.

please note too that:-

the nominated agencies are as under:

(1) Metals and Minerals Trading Corporation limited (MMTC);

(2) Handicraft and Handloom Export Corporation (HHEC);

(3) State Trading Corporation (STC);

(4) Project and Equipment Corporation of India Ltd (PEC);

(5) STCL Ltd;

(6) MSTC Ltd;

(7) Diamond India Limited (DIL);

(8) Gems & Jewellery Export Promotion Council (G&J EPC);

(9) A Star Trading House (only for Gems & Jewellery sector) or a Premier Trading

House under paragraph 3.10.2 of Foreign Trade Policy; and

(10) Any other agency authorised by Reserve Bank of India (RBI).”;

for more info link are:-

http://www.tax4india.com/indian-laws/indian-tax-law/custom-law/import-export.html

http://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=5792

Querist : Anonymous

Querist : Anonymous (Querist)

27 July 2011 thank you sir , thanks for the information given

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now