Jewellery firm and leading gold refiner Rajesh Exports has approached the government for permission to ship gold jewellery of 23- and 24-carat purity from its Cochin SEZ "on an urgent basis".
Earlier this week, the government has banned exports of gold jewellery, medallions and other articles above 22-carat purity in a bid to check round tripping of the precious metal.
In a representation to the commerce ministry, the company said it has been exporting 22-, 23- and 24-carat jewellery and 24-carat medallions from their Cochin special economic zone (SEZ) for many years.
It also highlighted certain issues faced by the company post the Goods and Services Tax (GST).
"Due to the implementation of GST on imports under advance authorisation, we have not been able to execute a single export order since July 1. Due to this, we are facing a very serious and a critical situation, which is heading towards a very grave irreparable situation," it has said.
Under advance authorisation, an exporter is allowed duty free import of raw material for export purposes. But in the GST regime, exporters will have to first pay integrated GST on such imports and then seek refund, which according to exporters is a cumbersome process and blocks working capital.
"...as an emergency measure, executing the already delayed urgent export orders of 22-, 23- and 24-carat gold jewellery and 24-carat gold medallions should be allowed from the Cochin SEZ," the company has added.
According to experts, it is difficult to make quality jewellery out of gold of 23- and 24-carat purity.
An official of the Gems and Jewellery Export Promotion Council (GJEPC) had pointed out that some exporters are availing of export incentives by claiming shipments of gold items of above 22-carat purity with some value addition.
Importing 23- and 24-carat gold and then exporting it without value addition is not a financially viable business, the official had said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)