Page 10 - Bullion World Volume 02 Issue 11 November 2022_Neat

Bullion World | Volume 2 | Issue 11 | November 2022

Figure 1: Benefits of Allowing Reverse Job Work

Protection against seasonal global demand
Better utilization of full-time skilled employees in the
unit
Full utilization of existing infrastructure and equipment
in the unit

Helps to give competitive pricing to global clients

Reduced working capital cost
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Percentage of Units

Source: Pilot Survey of SEZ Units

limited non-fiscal incentives and (UNCPC) Version 2.1 Code 886,
As the SEZ units await a uncertainty surrounding the future basic metal manufacturing services
new and robust policy, it of SEZ policy and concerns around includes outsourcing portion of a

is important to recognize the new DESH (Development of manufacturing process or completely
Enterprise and Services Hubs) Bill,
outsourced manufacturing process.
the need to modernise 2022. The survey identified following Since it covers manufacturing
the gems and jewellery core barriers: services only, the output is not
sector, invest in R&D, owned by the unit providing this

innovation and upgrade 1. Policy Uncertainty and Gaps service. The value of the service is
in the DESH Bill
skills. Incentives can Both the SEZ and DTA units find the based on service fee paid, not the
value of the goods manufactured.
be smartly designed evolving new SEZ policy, i.e., the Such services can be given
to link to these DESH Bill (2022) ambiguous and fiscal subsidy in the current WTO

criterions. There is uncertain. The DESH Bill (2022) framework as there is no discipline
scope for collaboration was expected to be tabled in the on subsidies in services.
between business and monsoon session of the Parliament. At the same time, the SEZ units
It was postponed and is now likely to
government in areas be discussed in the winter session. have welcomed the broad intention

such as capability The ambiguity surrounding the of the government to delink export
building and training and DESH Bill (2022) is on the type of conditions for giving incentives and
brand building fiscal and non-fiscal incentives it will allowing reverse job work under the
provide to the units, the conditions proposed DESH Bill 2022. Some
that are required to be met to get the firms raised concerns that if the
incentives, the terms and conditions policy is not aligning with other
Issues Faced by the Gems and applicable to sell to the DTA. There policies and incentives given in DTA
Jewellery Units in SEZ is need for definitional clarity on there can be relocation of firms
The issues faced by the units in terms like reverse job work and from DTA to Development hubs,
SEZs ranged from global issues manufacturing services and align only to avail the fiscal and non-fiscal
such as Russia-Ukraine war, rising such definition with the globally benefits.
inflation, slowdown in importing applicable definition. While there
countries, which the DTA units also is no global definition of reverse
face to SEZ-specific issues such as job work, according to the United
the withdrawal of fiscal incentives, Nation Central Product Classification

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