Gems & Jewellery Sector Expects Tax Relief, Cut in Import Duty on Gold, Improvement in Banking Finance From Interim Budget 2019

Mumbai, January 31: Gems and jewellery industry is keeping their eye on the Interim Budget which will be presented on February 1.  From reduction in import duty on gold from 10 percent to 4 percent, improvement in banking finance for the industry, income tax relief for mining companies to easy financing for the industry, the industry honchos have shared their expectation and demands with Retail Jeweller India.

All India Gem and Jewellery Domestic Council (GJC) chairman Anatha Padmanabhan in a letter to the Finance Minister Arun Jaitley asked the government to reduce the import duty on gold from 10 percent to 4 per cent. He further added, “The 10 percent import duty on gold was levied to curb the Current Account Deficit (CAD). Even after the improvement in the CAD position, the government has not reduced the import duty. We are expecting that the government will at least bring it down to 6 percent.”

Colin Shah, Vice President, Gem and Jewellery Export Promotion Council (GJEPC) is hoping for a reduction in import duty on cut and polished diamonds as well as on cut and polished gemstones to 2.5 per cent from the current 7.5 per cent. Indian Bullion and Jewellers Association (IBJA) UP State President highlighted that a bullion exchange for the industry is the need of the hour.

Sharing his expectations, Saurabh Gadgil of PNG Jewellers said, “We look forward to the removal of GST on job workers to protect encourage employment and also to save handcrafted jewellery business. Furthermore, elimination of commodity transaction tax (CTT) will curb dabba trading. Moreover, we are hoping that the budget will have some provisions to encourage gold investments and loans. ” GJEPC Chairman Pramod Agrawal wants the Indian government to change income tax regulations to enable foreign mining companies to sell rough diamonds through special notified zones and introduction of presumptive taxation system among other things.

Here is a look at some of the demands of the industry from Interim Budget 2019

• Cut in import duty on gold from 10 to 4 per cent.
• Revival of EMI scheme for the jewellers.
• Increase of cash transaction limit from Rs 2 lakhs to Rs 5 lakhs.
• Improvement in banking finance for the industry.
• Income Tax relief for mining companies.
• Removal of IGST on goods for exhibitions and re-import.
• Separate HS code for lab-grown diamonds and natural diamonds.
• Implementation of Baba Kalyani report on SEZ and the conversion of SEZ into a manufacturing zone.
• Reduction in import duty on polished diamonds to 2.5 per cent from the current 7.5 per cent.
• Mandatory hallmarking across the country.
• Establishment of jewellery parks in the country.
• Import duty on gold should be reduced by 2 percent year on year.
• Bullion Exchange for the industry.
• Income Tax relaxation in Gold Monetisation and Gold Bond Schemes.
• Bring gold into the asset class.
• Curb in raw gold and jewellery imports from ASEAN countries.

It will be interesting to see if the demands of the gems and jewellery industry are met in the Union Budget tomorrow.

Author: Manoj Chakraborty, Photo credits: (Photo credits: Newsclick)