Gems, jewellery sector urges Government to decrease GST from 3% to 1% in upcoming Budget

The All India Gem and Jewellery Domestic Council (GJC) also called for a lower GST slab for lab-grown diamonds and a dedicated Central ministry for the jewellery sector

Mumbai: The All India Gem and Jewellery Domestic Council (GJC) has requested a reduction in the Goods and Services Tax (GST) from 3% to 1% on revenue equivalence ratio to ease the cost burden on the industry in the upcoming Budget. The apex body has also called for a lower GST slab for lab-grown diamonds.  

The GJC has released a detailed pre-Budget representation to Union Finance Minister Nirmala Sitharaman, outlining actionable recommendations to unlock the full potential of India’s gems and jewellery sector, that plays a pivotal role in India’s economy, contributing significantly through exports, job creation and the preservation of cultural heritage. The note points out the numerous challenges the industry faces, including complex taxation, stringent compliance requirements, and limited access to finance and calls on the Government to address these issues.

“We seek rationalization of taxes and availability of finance to support business,” the All India Gem and Jewellery Domestic Council (GJC) Chairman Rajesh Rokde said in a media statement. With the continuously increasing gold rates, the current rate of GST is increasingly becoming a burden for the industry and end customers, he added. Therefore, GJC is calling for a reduction in GST from the current 3% to 1% in the upcoming Budget, which will encourage compliance, Rokde said.

The tax reduction will enhance affordability for consumers, especially in rural areas, and most importantly, improve revenue collection by increasing the size of the formal economy, he added.

The industry apex body said there is a need to introduce a concessional GST rate for lab-grown diamonds to fully recognize their sustainable and cost-effective attributes compared to natural diamonds. Currently, both natural and lab-grown diamonds are taxed at the same GST rate.

GJC further asked the Government for a dedicated ministry and requested State-wise nodal offices and appointment of a Central minister specifically for the jewellery sector.

“We request the Government to consider the EMI on jewellery, which has been a long-standing demand of the industry. Gold monetization scheme also needs a revamp as it has the potential to unearth idle household gold in the economy and thus help us to be self-reliant and promote less imports,” GJC Vice-Chairman Avinash Gupta said.

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