All India Gem and Jewellery Domestic Council (GJC) has sought immediate rollback in import duty of gold – the basic raw material for the jewellery business – from 12.5% to 10% and immediate implementation of a comprehensive integrated Gold Policy to save the gem & jewellery business and the jobs of 55 lakh labour force engaged in the business and the livelihood of their dependents/ families. The Import Duty of 12.5% + GST of 3% has made gold jewellery costlier thereby negatively impacting consumer sentiment leading to postponement of purchase decisions. The lack of demand in the gem & jewellery has resulted in many craftsmen and artisans being out of work and shifting to other businesses, where they are getting employment. And there have been several reports of gem & jewellery sector workers committing suicide.
GJC also recommends for a comprehensive Gold policy covering various aspects of the Gems & Jewelery industry on various concerns such as PAN Card Limit to be increased from 2 lacs to 5 lacs, since because of rising gold price the 2 lacs limit is very low and since most of the customers are rural segment having agricultural income, resulting in no Income Tax purview and hence no PAN card.
In our country, almost 60 to 70% jewellery are made in 22ct. Gold and play a very important part in daily trade. EMI for 22ct gold jewellery should be reinstated and restriction should be continued for 24 ct. gold bullion. This will help the industry to grow stronger towards the organised and complaint business. In Union Budget 2018-19, the Finance Minister announced Gold as an asset class and as recommended in NITI Aayog – Transforming India’s Gold Market; Permit purchase of Jewellery by credit cards and subsequently allow EMI on Jewellery to boost digitalization in the Jewellery business.
It is imperative to immediately implement a revamped Gold Monetization Scheme (GMS) and make it more effective to benefit citizens at large. To unlock family gold reserves of up to 24,000 tonnes and help reduce CAD, GJC urged that Government must give exemptions to households for minimum 500 grams of gold deposited under Gold Monetary policy, being of ancestral nature, from being questioned by any tax department.
Mr. Shaankar Sen, Vice Chairman, GJC said “The Government should implement Gold Policy immediately to liberalize and simplify Gold Monetization Schemes to recycle household gold for utilization. The hike in Custom Duty has resulted in tremendous job losses and the Industry is in complete chaos due to rising Gold price. Millennials are shying away from the Industry. GST which is 3% on Gems & Jewellery Industry and Custom Duty of 12.5% makes gold dearer and ultimately makes it a very niche commodity even though it is the lifeline of the lower income group segment. On one hand, the Government talks about taking Indian craftsmanship to the world while on the other hand its policies are making our skilled artisans leave the business with all their learnings, experience and expertise.”
GJC also recommends to reduce the GST on the Jewellery sector to 1% instead of 3% as lower tax will result in generating more revenue to the Central and State Government. The classic example witnessed by the industry is in case of Kerala where a 5% VAT levy led to low demand for the business and compliance & collection issues for the Government. Thus, the Kerala Government was required to introduce a composition scheme for jewellery industry in 2015 prescribing lower tax rates.