RBI direction on import of gold by Qualified Jewellers as per IFSCA guidelines

[Guidelines on import of gold by Qualified Jewellers as notified by – The International Financial Services Centers Authority (IFSCA)]

RBI notified agencies in case of banks and nominated agencies as notified by DGFT, and the Qualified Jewellers (QJ) as notified by International Financial Services Centers Authority (IFSCA) are currently permitted to import gold under specific ITC(HS) Codes through India International Bullion Exchange IFSC Ltd. (IIBX);

The Reserve Bank of India on Wednesday issued directions in this regard to resident Qualified Jewellers to enable them to import gold through IIBX or any other exchange approved by IFSCA and the DGFT, Government of India.  The conditions for the licence are clearly mentioned in the licence itself. The gold import rules of India within the contours of the Regulations changed from time to time, Reserve Bank of India issues directions to Authorised Dealers (ADs) under Section 11 of the Foreign Exchange Management Act (FEMA), 1999.

As per the RBI notification dated May 25, 2022, the below-mentioned arrangement is for the sole purpose of facilitating the physical import of gold through IIBX or any similar exchange authorised by IFSCA, by Qualified Jewellers (QJs) in India.

• AD banks may allow Qualified Jewellers (QJs) to remit advance payments for eleven days for the import of Gold through IIBX in compliance with the extant Foreign Trade Policy and regulations issued under IFSC Act.

• AD banks are required to ensure that advance remittance for such import through exchange/s authorised by IFSCA shall be as per the terms of the sale contract or other document in the nature of an irrevocable purchase order in terms of IFSC Act and regulations made thereunder by IFSCA.

• Further, AD bank handling the transactions shall carry out all the due diligence and ensure the remittances sent are only for the bona fide import transactions through exchange/s authorised by IFSCA.

• The advance remittance for the import of Gold should not be leveraged in what-so-ever form for importing Gold worth more than the advance remittance made.    In case the import of Gold through IFSCA authorised -exchange, for which advance remittance has been made, does not materialize, or the advance remittance made for the purpose is more than the amount required, the unutilised advance remittance shall be remitted back to the same AD bank within the specified time limit of eleven days.

• For gold imported through IIBX, QJ shall submit the Bill of Entry (or any other such applicable document issued/approved by Customs Department for evidence of import), issued by Customs Authorities to the AD bank from where advance payment has been remitted. “All payments by qualified jewelers (QJs) for imports of gold through IIBX shall be made through exchange mechanism as approved by IFSCA in terms of IFSC Act and regulations. Any deviation from the extant guidelines for import of Gold through IIBX need to be approved in advance by IFSCA and other applicable and appropriate authority/ies” RBI said.
• “IFSC Authority (IFSCA) will conduct all required due diligence on the exchange – IIBX including all other entities involved in enabling import of Gold by QJs in terms of the IFSCA regulations. IFSCA shall also put in place the necessary system to ensure that the advance remittance received from QJs is solely for the purpose of the import of gold through IIBX.” It added

RBI instructions to AD banks:

The banking regulator said that all required documentation, custom duty-related procedures and filing Bill of Entry as evidence of import, etc. are complete for the import of Gold by QJ within the specified applicable period.

The single/multiple ORMs created and matched with corresponding BoEs (Bill of Entry) shall be closed appropriately in IDPMS.

The AD banks are also required to ensure that the importer – (QJs) comply with the related extant instructions relating to imports under FEMA, 1999, FTDR Act 1992, Foreign Trade Policy, and regulations of IFSCA. In this regard, AD banks may frame their own internal guidelines to deal with such cases, with the approval of their Board of Directors.