Export Procedure of Gems Jewlry

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SCHEME OF PRESENTATION

3. Human Resource and budget of the organization


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GEMS & JEWELLERY


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GEMS & JEWELLERY EXPORT OF PAKISTAN

Export Trend During FY 2007 to 2011

S.

N

o

SECTOR

FY

July-June

(07-08)

FY

July-June

(08-09)

FY

July-June

(09-10)

FY

July-June

(10-11)

Change in FY11

compared to FY10

Value %age

1 Gems & Jewellery 221 288 641.677 407.347 (234.330) (36.52)

Export Trend During July March 2011-12 vis--vis 2010-11

S.

NoSECTOR

FY

July-March

(11-12)

FY

July-March

(10-11)

Change

Value %age

1 Gems & Jewellery 587.195 280.186 307.009 109.57


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%age share of Gems & Jewellery in Minerals &

Metals Exported from Pakistan(2010-11)Sr. # Product %age

1 Petroleum Products 67.98

2 Gems &Jewellery

20.43

3 Chromite 5.95

4 Dimension Stones 3.03

5 Talc (Soap Stone) 1.46

6 Salt 0.39

7 Iron Ore 0.36

8 Gypsum 0.15

9 Fluorspar 0.10

10 Lead & Zinc 0.05

11 Copper Ore 0.03

12 Coal 0.03

13 Manganese Ore 0.02

14 Others 0.01

67.98

20.43

5.95

3.031.46

0.39 0.36 0.15 0.1 0.05 0.03 0.03 0.02 0.01

0

10

20

30

40

50

60

70

80

%age Share


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PAKISTAN GEMS Geologically, Khyber Pukhtoonkhwa, FATA, Northern Areas

and Baluchistan (alongwith the border of Afghanistan) andAzad Kashmir represent the favorable environment for theformation of precious and semi-precious gemstones. Theloftiest mountains of the world, the Hindukush, Karakoram andHimalayan mountains host almost entire gem potential ofPakistan including fascinating mineral specimen. Major

potential deposits of Gemstones include Emerald, Ruby, Topaz,Aquamarine, Periodot etc.

Mining of Gemstones in Pakistan is being done throughprimitive methods and subsequent cutting & polishing ofstones is also traditional not matching to international

standards. Pakistan also lacks in fashion designing andsophisticated cutting & polishing of stones. This is the mainreason that Pakistan has not been able to penetrate in theinternational market which is evident from the fact thatPakistans share in Gemstones export is less then 1% i.e.US$3.81 Million in 2010-11 in the total world exports of

around US$ 93 billion.


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POTENTIAL GEMS RESERVES IN

PAKISTAN

KHYBER PAKHTUNKHWA

Gems Location Reserves

Emerald Swat 70 Million Carats

Pink Topaz Mardan 9 Million Carats

Peridot Hazara & Kohistan 10 Million Carats

Ruby Northern Areas 1.5 Million Carats

Aquamarine 0.2 Million Carats

Tourmaline 0.1 Million Carats

AZAD KASHMIR

Ruby 12.5 Million Carats


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GEMS - WORLD RESERVES

(PAKISTAN SHARE)

World Reserves 5000 Million Carats

Pakistan 100 Million Carats

Pakistan Share in World 2%


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Top 10 Gems Exporters 2010 Values inMillion US$

World-Top 10 Gems Exporters 2010

Total Million US$= 93,624.60

World-Top 10 Gems Exporters 2010

Total Million US$= 93,624.60


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Top 10 Gems Importers 2010Values in Million US$

World-Top 10 Gems Importers 2010Total Million US$= 93,626.73

Asia-Top 10 Gems Importers 2010Total Million US$= 44,344.86


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PAKISTAN

GEMS-Product wise Analysis (FY2010-11) & (FY2009-10)

Sr.

No

HS

Code

Products

July-June (Quantity) July-June (Value)

Unit (10-11) (09-10)

%

Change (10-11) (09-10)

%

Change

1 71011000 NATURAL PEARLS GM 0 16 (100.00) - 0.001 (100.00)

2 71012200 CULTURED PEARLS WORKED GM 0 3269 (100.00) - 0.000 (100.00)

3 71021000 UNSORTED, (ROUGH) DIAMONDS GM 116330 741151 (84.30) 0.188 0.152 23.55

4 71023900OTH NON-IND DIAMOND

WORK,N-MOU GM 0 1833 (100.00) - 0.033 (100.00)

5 71031000UN-WORKED/SIMPLY SAWN PRE-

STON GM 14237375 27692299 (48.59) 3.177 2.930 8.41

6 71039100RUBIES,SAPPHIRE,EMERALD

WORKED GM 4110 0 #DIV/0! 0.001 - #DIV/0!

7 71039900OTH SEMI/PRE STONES WORKED

N.S GM 1461169 4275599 (65.83) 0.435 0.465 (6.31)

8 71041000 PIEZO-ELECTRIC QUARTZ GM 0 2100 (100.00) - 0.000 (100.00)

9 71042000OTH UN-WORKED SAWN,SYN

PRE STO GM 5500 193870 (97.16) 0.001 0.016 (95.01)

10 71049000OTH SYN/RECONSTI SEM/PRE

STONE GM 18270 283896 (93.56) 0.003 0.144 (97.81)

11 71059000OTH DUST/POWDER NAT SYN

PRE ST KG 0 5 (100.00) - 0.000 (100.00)

TOTAL GEMS 3.805 3.741 1.70


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GEMS-Pakistan Export Markets(2010-11) US$ million

Sr. No Country Export

July-June

Change

10-11 09-10 Value %

1 U.S.AMERICA 1.102 1.211 (0.109) (9.00)

2 U.A.E. 0.565 0.524 0.041 7.82

3 UNITED KINGDOM 0.393 0.348 0.045 12.93

4 HONG KONG 0.389 0.476 (0.087) (18.28)

5 GERMANY 0.280 0.329 (0.049) (14.89)

6 THAILAND 0.238 0.132 0.106 80.30

7 CANADA 0.159 0.145 0.014 9.66

8 OTHER COUNTRIES 0.126 0.090 0.036 40.00

9 INDIA 0.109 0.152 (0.043) (28.29)

10 JAPAN 0.084 0.105 (0.021) (20.00)


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GEMS

Reasons for Insignificant Export of Gems

Gems from Pakistan are generally exported as embedded part of thejewellery.

Mining of Gemstones in Pakistan is being done through primitivemethods and subsequent cutting & polishing of stones is alsotraditional not matching to international standards.

Pakistan also lacks in fashion designing and sophisticated cutting &polishing of stones.

Security concerns in areas which host almost entire gemstonespotential of Pakistan.


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Gems & Jewellery

The facilities and incentives (beside other reasons) provided by TDAP during last 03 years haveresulted in the tremendous export of Gems & Jewellery from US$ 48 Million in 2006-07 to US$221 Million in 2007-08 and US$ 288 Million in 2008-09.

During Fiscal Year (09-10) Gems & Jewellery exports jumped to record figure of US$641.67Million.

However, export of US$ 300 Million is in accordance the existing infrastructure available in thecountry. The rest i.e. around US$ 341 Million is BubbleExport (due to high prices in internationalmarket), bound to evaporate within couple of years.

Keeping in view the fact ofBubbleExport during Fiscal Year (10-11) Gems & Jewellery exportwas US$ 407.347 Million.

In the current Fiscal Year the export of Gems & Jewellery till July-March FY11-12 is US$587.195Million as compared to US$ 280.186 Million during the same period in FY10-11 with rise of100.57%.


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Gems & Jewellery

Incentives offered by TDAP (Entrustment Scheme)

The shipment period for export of gold jewellery against imported goldunder Entrustment Scheme, has been enhanced from 120 days to 180days.

The period in realization of sale proceed has been extended from 190 to280 days from the date of shipment.

The import of Silver and Platinum has also been allowed under theEntrustment Scheme.

Import of Diamond and other Precious Stones is allowed on Self-Consignment Basis under specific procedure of Customs Authority.

Import of Gold, Silver, Platinum, Palladium, Diamonds and gemstonesunder all schemes are exempted from normal import tariffs.

The import of raw materials, tools, machinery and equipment used in themanufacturing of Jewellery has been allowed free to custom duties andwithout payment of advance income tax.


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Government has allowed jewellery industry as zero rated.

In case any exporter of gold jewellery uses duty-paid raw materialsprocured from the local market, duty drawback shall be admissibleaccording to the standard duty drawback system. Refund of sales tax, if

paid, shall be allowed according to the Sales Tax Refund Rules of 2005.

Procedure of valuation and custom has been streamlined in a joint meetingof Customs, ASF and TDAP on 24-10-2009 and in subsequent meetings.This helped in streamlining the unhindered flow of Gems & Jewelleryexports by encouraging the traders.

Self financing scheme is adopted to facilitate Gems & Jewellery exportersfor visiting promising markets for the enhancement of their exports.


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Gold wastage or manufacturing loss in the production of gold jewellery hasbeen allowed to the exporters as under:

Plain gold jewellery 2% of gold content of jewellery by Weight.

Studded or embedded gold jewellery 10% of gold content of jewellery

by Weight.

Export of gold jewellery has been allowed with minimum value addition as

under:

4% on gold bangles and chains 6% on other plain jewellery

9% on studded or embedded jewellery.


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EXPORT REQUIREMENTS

Membership of one of the recognized Association of

Jewelry and Gemstones

Registration with Trade Development Authority Of

Pakistan(TDAP)

NTN certificate

National Identification Card

Membership certificate of Chamber of Commerce and

Industry

Membership certificate of association Recommendation letter

Sales tax registration number

Bank certificate

Jewelry Pass Book

E t P d G l


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Export Procedure - General

Export of gold jewelry shall be allowed by air, parcel post, courier

services and by sea, as accompanied or unaccompanied baggage.

Export of gold jewelry shall be against advance paymentirrevocable L/C firm order or contract, delivery on payment or

delivery on acceptance (DP/DA), or consignment sale, as well as on

self-consignment basis through authorized representative.

Export of gold jewelry shall be made through E procedure of

SBP. The sale proceeds shall be appropriated either wholly in foreign

exchange through normal banking channels or partly in the form of

gold up to one hundred per cent weight of gold content of jewelry

exported including wastage, and gemstones, and partly in foreignexchange for value addition.

S i l S h f t f G & J l


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Special Schemes for export of Gems & Jewelry

Entrustment Scheme: It provides for export of gold jewelry & articles, against gold supplied as partial advance

payment, by the foreign buyer, to the extent of the quantity of gold including wastage used in

manufacturing of exported items. The exporter shall supply gold jewelry of contracted quantityof gold content within (180) days from the date of import of gold into Pakistan, in case of

failure to export jewelry with 180 days, the exporter will pay livable duties and taxes on

imported gold and 5% penalty of livable duty for first month and 10% for subsequent months.

Self Consignment basis: The exporter will submit an application

The import authorization shall be valid for (120) days The jewelry Pass Book, duly authenticated

The sale proceeds shall be realized, within 242 days

The unsold jewelry or gemstones shall be deposited with the Customs authorities

Display or Sale in international Fairs & Exhibitions: Exporter shall be allowed to take out gold jewelry and gemstones, for display and sale in

international fairs and exhibitions, either as accompanied baggage or through parcel post

or courier service, according to the procedures as mentioned in entrustment scheme.

Sales of Jewelry to foreign buyers and overseas Pakistanis: Foreign national and overseas Pakistanis shall be allowed to take out personally gold jewelry

or gemstones up to the limit of US Dollars ten thousand, against foreign currency encashment

certificate, with itemized purchase receipts and, if the value exceeds US Dollars ten thousand,the normal export procedure shall be followed.


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,OTHER RAW MATERIAL

Import of Gold & Gemstones against export of Jewelry:In case of exports of gold jewelry made from locally produced gold and

gemstones where sale proceeds are realized wholly in foreign exchange,

the exporter shall be entitled to replenishment of gold at one hundred per

cent of gold content of jewelry exported including wastage and

gemstones actually used in the jewelry exported and the exporter shall

be entitled to claim import entitlement for the replenishment within onehundred and eighty (180) days from the date of realization of export

proceeds.

Advance import of Gold

Exporters may also apply in the form as set out in Annex, E for advanceauthorization of import of gold and gemstones, before export of jewelry,

as per letter of credit or firm export order or contract, subject to deposit,

with their bank of cash margin equal to one per cent of the value of gold

and gemstones and in this case the procedures under the Entrustment

Scheme shall apply.

DIFFERENT NORMS AND STANDRADS


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DIFFERENT NORMS AND STANDRADS:

Duties & Taxes: Import exempt from normal import tariffs.

Raw materials, tools, machinery and equipment under import of gold and gemstones against

export of jewelry or import entitlement will free of customs duties and advance income tax. In case an exporter uses duty-paid raw materials procured from the market, duty drawback

shall be admissible according to the standard duty drawback system in force.

Sales Tax on export of Gold Jewelry and Gemstones will be zero-rated. An exporter can

claim refund of Sales Tax paid on raw material inputs.

Advance Tax at the rate of .75% shall be charged on export of Gold Jewelry and Gemstones

along with 0.25% Export development surchargeWastage of Gold:Gold wastage or manufacturing loss in the production of gold jewelry shall be allowed 2% of

plain gold jewelry & 10% on studded and embedded jewelry.

Value Addition:Export of gold jewelry shall be allowed with minimum value addition as provided in

clause (c) of para 8, given below:

a) 5% on gold bangles and chains;

b) 10% on other plain jewelry; and

c) 15% on studded or embedded jewelry.

Purity and Form of Gold:

Import of gold, directly by the exporter or supplied by foreign buyers, shall be in minimumquantity of five hundred grams, in standard bars/slabs/grains form in 995.0, 999.9 fineness.

IMPORT PROCEDURES


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IMPORT PROCEDURES

1. Arrival of Goods at Customs Port:

Appraisal, where the goods are physically verified and customs duty is assessed

Appraisal where the actual or final duty is calculated and levied upon the importer.

2. Filing and Examination of Bills of Entry:

The customs clearance process starts with the arrival of cargo ship, plane or other carrier

of goods in the country on the designated sea, land and air ports. Upon arrival of the

goods at the customs port, the port authorities issue the Import General Manifest (IGM) to

each shipment.

It is a number indicating the serial of the shipment arrived during the year. Upon receipt of the IGM the consignment is further indexed to allow for a systematic

reference of all goods received.

After issuing this number, the shipment is off loaded and sent back to port warehouse.

3. Assessment of customs duty Invoice of shipment

Packing List Bill of Lading

Copy of letter of credit or contract


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NORMS & STANDARDS Duties and Taxes:

exempt from normal import tariffs.

Exempt from custom duty and advance income tax.

Sales Tax on export of Gold Jewelry and Gemstones is zero-rated.

claim refund of Sales Tax paid on raw material inputs.

Advance Tax at the rate of 0.75% shall be charged on export of Gold Jewelryand Gemstones along with 0.25% Export development surcharge

Purity and form:

Import of gold, directly by the exporter or supplied by foreign buyers, shall be

in minimum quantity of five hundred grams, in standard bars/slabs/grains form

in 995.0, 999.9 fineness. A conversion table including twenty-four carats gold into lesser karatage

prepared for the bank and Customs.


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Suggestion/Action Plan

Gems & Jewellery Development

Survey & Exploration of New Promising areas of Gemstones by GeologicalSurvey of Pakistan.

Modern Technology for Safe & Sophisticated Mining & Extraction.

Human Resource Development: Gems & Gemological Institute of Peshawar.

Pakistan Gems & Jewellery Institute of Karachi

Participation in International Exhibitions:

Ambiente (Beauty World), Frankfurt, Germany, 10-14 February, 2012

LifeStyle Pakistan Exhibition, New Dehli, India, 12-15 April, 2012

Tucson Gems & Jewellery Show, Tucson, USA, January, 2013


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Export Procedure of Gems Jewlry

Documents

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