Value addition in gems and jewelry sector for exports

This query is : Open

Nitesh Barman (Querist)
Follow

20 June 2016 Please clear the concept of Value Addition Calculation while export of gems and jewelry.
Value Addition (VA) for gems and jewellery sector shall be as per paragraph HBP v2 .
It would be calculated as under:
A – B

VA = ----------- x 100,

B

where,
A = FOB value of the export realized / FOR value of supply received.
B = Value of inputs (including domestically procured) such as gold / silver / platinum content in export product plus admissible wastage along with value of other items such as gemstone etc. Wherever gold has been obtained on loan basis, value shall also include interest paid in free foreign exchange to foreign supplier.

If anyone, clear it with example.

Dr.RAMAKRISHNA. C

Dr.RAMAKRISHNA. C (Expert)
Follow

28 July 2016 A (FOB value realized) is Rs. 50,00,000/-. B (value of all inputs such as Gold/Silver/Platinum content in the export + admissible wastage along with value of other items such as Gem stones including the value of Gold obtained on loan basis paid in free foreign exchange to foreign supplier is 30,00,000/- Now the Value addition (VA) is (50,00,000 -30,00,000) / 30,00,000 multiplied by 100 equivalent to 66.66%

Nitesh Barman

Nitesh Barman (Querist)
Follow

24 February 2018 Thank you very much for your reply, i have another query regarding it. Is there any relation between Value Addition (VA) for gems and jewellery as per FTP and profit export consignment ?
As
FOB value of export shipment - 50,00,000/-
Value off all commodity used in manufacturing + wastage + labor - 4300000
Profit - 700000
So, value addition will be - 16.28 % and profit will be 14.00 %
And what use of value addition of FTP ?

Upgrade to CAclubindia Pro. Subscribe Now!