The country's much-awaited maiden gold policy is now at final stage, keeping a number of provisions including introduction of a new system for gold bar imports, officials said.
As part of the move to create a favourable climate in import, purchase and export of gold and gold products, the commerce ministry has already prepared a draft of the gold policy which officials believe will be finalised soon in consultation with the stakeholders.
After years of demand from various quarters, the government finally put the country's first-ever gold policy on table to bring transparency and accountability in the growing gold market, they mentioned.
According to the draft, a new system could be introduced through authorised dealer (AD) to meet the local demand for jewellery. Initially, two commercial banks could be declared as authorised dealer banks.
The AD banks will have to import gold bars from international gold bar producers/suppliers and they will not be able to import jewellery or other form of jewellery except gold bars, the draft policy mentioned.
According to Section 2 (4) of the policy, the banks will get duty-free/bond facility for importing gold but they will mandatorily take licence from Customs Bond Commissionerate as per the import policy and tax act.
Producers/traders/dealers registered with VAT Commissionerate could purchase gold bars from authorised dealers. Producers/traders have to obtain licences from deputy commissioner concerned simultaneously according to Gold (Procurement, Storage and Distribution) Order, 1987.
Besides, the AD banks would collect required duty and tax.
The National Board of Revenue (NBR) will take actions including cancelation of VAT registration if any registered traders violate rules, a commerce ministry official said.
Despite having immense potential, export of gold ornaments is negligible compared to other neighbouring countries due to various reasons, said a jeweller.
The government should take necessary steps to identify potential jewellery exporters, according to recommendations.
As per the draft policy, renowned jewellery exporters will provide different incentives. The government will also issue export certificates to legal/registered traders.
The hallmarking system for gold should be introduced to ensure the standards of jewellery, the draft reads. The draft policy suggested amending the present Passenger Baggage Rule. Passengers can bring up to 100 grams of gold ornament as duty-free annually.
Besides, latest equipment would be used to examine goods from the United Arab Emirates, Kingdom of Saudi Arabia (KSA), Qatar, Bahrain, Malaysia, Singapore and Hong Kong as these countries are at high risk for smuggling.
According to the draft policy, a self-sufficient central database of the country's gold sector would be created including annual demand, import, export, buy and sell, amount revenue etc.
The policy would be used for the country's import, export and trading if finalized.
When contacted, Tapan Kanti Ghosh, additional secretary of the commerce ministry, said a draft gold policy has been prepared. "We will fine-tune the draft and include some required provisions, if necessary. We will finalise it as early as possible."
He, however, said gold import has been given priority in the draft policy. Neighbouring India earned a total of US$ 42.29 billion by export of its ornaments in 2016. Bangladesh took an initiative to export ornaments in the 80s. But it was not possible to export ornaments from the country as local ornament traders think that local market is more profitable for them, according to the Export Promotion Bureau (EPB) data.
The country's gold sector fetched only US$ 672 in the fiscal year (FY) 2014-15.
There is no specific data on the country's demand for gold, precious metals and stones and their supply, the state-owned entity EPB said.
The country has an annual demand for gold between 20 tonnes and 40 tonnes. And most of them are not imported in legal way, industry insiders said.
General Secretary of Bangladesh Jewellers Samity Dilip Kumar Agarwala told the FE Friday that currently, the country's jewellery manufacturers cannot purchase gold through proper channels. "Our 50 per cent supplies come from recycled gold, and the rest come from expatriate workers and travellers."
It will be better for gold business if a fresh policy is framed, he said.
"We want the government to implement the proposed policy before the next fiscal budget. It is taking enough time to introduce the policy," he mentioned
Presently, there are over 12,000 members under the Bangladesh Jewellers Samity across the country including 1,200 members in Dhaka city, a source said.
A Bangladesh Bank (BB) official said an importer can now import gold only after getting approval from the central bank.
Recently, Transparency International Bangladesh (TIB) conducted a qualitative study between July and November in 2017 to identify problems and challenges in the sector and suggest ways to establish a transparent and accountable trading system.
The watchdog also placed some recommendations to ensure governance in the gold sector -- formulation of an inclusive act, registration of all gold traders following tax payment on all their gold and gold ornaments, making licensing mandatory for the traders, banning commercial use of gold coming under Baggage Rules, and importing gold through state-owned banks under the supervision of Bangladesh Bank and the National Board of Revenue (NBR).
In a presentation, TIB researchers said there is an annual demand for 18-36 tonnes of gold in the country, the major share of which comes through smuggling.
Gold traders are mostly dependent on smuggled gold and unwilling to import it legally because of high duty, procedural complexities, the delay in getting approval for import and lack of freight transport and insurance facilities, they said.
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