Gems & jewellery sector seeks cut in gold import duty to 4%

The gems and jewellery industry has sought reduction of gold import duty to 4 per cent, cut and polished diamonds and cut and polished gemstones to its 2.5 per cent and relaxation of credit norms for working capital requirements in the forthcoming budget.

All India Gem and Jewellery Domestic Council (GJC) chairman Anatha Padmanabhan in a letter to finance minister Arun Jaitley said the 10 per cent import duty on gold was levied to curb current account deficit (CAD). India’s trade deficit narrowed more-than-expected to USD 12.96 billion in June 2017, but the increased import duty on gold has given rise to the grey market, he added. He said PAN card limit should be raised to Rs 5 lakh from Rs 2 lakh. As the PAN card holders are not even 50 per cent of our population and making it mandatory for purchase of gold jewellery above 2 lakh is difficult in rural areas especially as customers are either reluctant to share or do not have one, he added.

Meanwhile, Gem and Jewellery Export Promotion Council (GJEPC) chairman Pramod Kumar Agrawal urged the government to reduce 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. He further asked the government to allow 5 per cent of the FOB (free on board price) value of exports of cut and polished diamonds to be re-imported duty-free in the preceding licensing year for the exporters.

GJEPC urged the government to change income tax regulations enabling foreign mining companies to sell rough diamonds through a special notified zone. “We also seek authorities to notify GST rate of 0.25 per cent on input services (at least job work services and grading and certification services) and extend the benefit of inverted duty structure to such services also.

The GJEPC asked for a conducive banking environment for exporters of gems and jewellery sector in terms of relaxing credit norms for working capital requirements. “We also urge the government to introduce interest subvention of 5 per cent on export finance for the gem and jewellery sector,” he added.

India Bullion and Jewellers Association (IBJA) director and national vice president and PNG Jewellers CMD Saurabh Gadgil said he hoped elimination of commodity transaction tax (CTT) will curb ‘dabba’ trading.

Kalyan Jewellers chairman and managing director T S Kalyanaraman said, he is expecting an uptick in discretionary consumable spends due to the expected move of increasing the tax exemption slab to Rs 5 lakh. This will augment disposable income and contribute to enhanced spending on items like gold and jewellery and other consumable sectors, he added.

Courtesy: Financial Express

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