Jewellery industry urges Government to reduce GST on ornaments and bullion from 3% to 1.25% 

According to industry leaders, high taxation has been stifling growth, discouraging consumer demand and pushing a significant portion of the trade into the unregulated market 

Mumbai: The gems and jewellery industry has once again called on the Government to rationalize the Goods and Services Tax (GST) on bullion and ornaments, urging authorities to reduce the rate from the current 3% to 1.25%. According to industry leaders, high taxation has been stifling growth, discouraging consumer demand, and pushing a significant portion of the trade into the unregulated market. 

“The jewellery industry has been burdened with high taxation rates, negatively impacting businesses and encouraging unregulated trade,” Rajesh Rokde, Chairman, All India Gem and Jewellery Domestic Council (GJC) said in a media statement. The GJC, representing retail jewellers across the country, stressed that a more reasonable tax rate would ensure the industry’s long-term sustainability while also securing government revenues by reducing tax evasion and illicit trade. 

Rokde reiterated the industry’s appeal, stating, “We request the GST Council and concerned authorities to reconsider and rationalize the GST rate to 1.25% from the current 3%, ensuring sustainable growth for the industry while maintaining a robust tax base.” According to Rokde, the current tax structure has led to unintended consequences, including reduced profit margins for businesses, increased costs for consumers and a shift of transactions to informal channels. 

Further elaborating his stand, Rokde pointed out that the fundamental principle behind GST implementation was revenue neutrality—ensuring that tax revenues remain comparable to pre-GST levels. He explained that based on the past indirect tax structure, the revenue-neutral rate for the gems and jewellery industry should be 1.25%, not the current 3%. 

Before GST was introduced, the industry was subjected to various indirect taxes, which collectively resulted in a lower effective tax burden than what businesses currently face. 

Reducing the GST rate, industry leaders argue, would have multiple benefits. It would boost domestic manufacturing, generate employment across various sectors—including skilled artisans, craftsmen, and small-scale traders—and enhance India’s global competitiveness as a jewellery-making hub. 

With India being one of the world’s largest consumers and exporters of jewellery, a more balanced tax regime could play a crucial role in sustaining the sector’s growth and ensuring that its contribution to the national economy remains strong. The industry now awaits the Government’s response, hoping for a revision that aligns taxation with economic realities and industry needs. 

Retail Jeweller India News