Union Budget 2021: Gems, jewelry business seeks discount of import responsibility to 4%

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All India Gem and Jewellery Domestic Council chief Ashish Pethe stated the EMI facility ought to be prolonged to their business and to extend the money buy restrict to Rs 1 lakh from Rs 10,000

Representational picture. Reuters

Mumbai: The gem and jewelry business has sought discount in customs responsibility on gold to 4 p.c, withdrawal of tax collected at supply (TCS), lower in import responsibility on polished valuable and semi-precious gems, within the upcoming Union Budget 2021-22.

All India Gem and Jewellery Domestic Council (GJC) Chairman Ashish Pethe informed PTI, “We urge the government to reduce the customs duty to 4 percent from the current 12.5 percent. If the tax rate is not kept at this level, it will encourage smuggling and encourage people to do unorganised business.”

He additional urged the federal government to maintain items falling beneath HSN-71 (Harmonised System Nomenclature) out of the purview of TCS provisions as the quantity of funds blocked in TCS is 6.67 instances greater than the power to pay earnings tax, leading to blockage of funds.

Pethe additionally stated the ability of equated-montly instalment (EMI) ought to be prolonged to the gems and jewelry business and to extend the money buy restrict to Rs 1 lakh from the present Rs 10,000.

Gems and Jewellery Export Promotion Council (GJEPC) Chairman Colin Shah urged the federal government to scale back import responsibility on lower and polished valuable and semi-precious gems to 2.5 p.c, from the present 7.5 p.c.

In its Budget suggestions, GJEPC has additionally proposed a hike in import responsibility on artificial lower and polished stones to 25 p.c from 5 p.c.

Shah stated GJEPC has additionally proposed modification in taxation provisions to permit sale of tough diamonds in particular notified zone in Mumbai.

Malabar Group Chairman MP Ahammed has urged the federal government that tax charge, together with import responsibility on gold and GST, ought to be diminished to 7 p.c.

Ahammed has additionally stated the federal government ought to create an enabling surroundings for the jewelry retail commerce to introduce MRP pricing in jewelry with none pricing break-up when it comes to GST or different taxes.

Currently, gold attracts 12.5 p.c import responsibility and three p.c GST and complete responsibility and GST implication works out at 15.5 p.c.

“Such high taxes have led to large-scale smuggling and tax evasion. Therefore, reducing import duty-GST implication to 7 percent is an effective measure to prevent those industry malpractices,” he added.

Although the tax and responsibility implication is 15.5 p.c on gold, the precise implication involves round 20 p.c after including the mining royalties.

The gold and diamond commerce collectively accounts for 7.5 p.c of the nation’s GDP and 14 p.c of the nation’s complete exports. About 60 lakh persons are employed on this sector.

Therefore, Ahammed famous that the federal government ought to take steps to facilitate complete growth of the grade commerce sector in order that it might probably proceed to play a pivotal position within the progress of the economic system.

PNG Jewellers Chairman and Managing Director Saurabh Gadgil opined that 2020-21 has had a unfavorable impression on the business over all.

“While jewellers are on track to recover from the impact of the pandemic and a muted wedding season, we are hopeful that the Budget 2021-22 will look at the jewellery industry favourably and roll out many SOPs and important policy changes that can help revive the industry in the next one year,” he stated.

It is important that the federal government additionally take a look at insurance policies that encourage banks to kick-start lending as soon as once more to the jewelry sector, which is able to assist companies throughout the board to keep up liquidity and guarantee survival and success, he identified.

From the buyer perspective, he stated gold ought to be deemed as an asset class just like the mutual funds, permitting a rise in client funding confidence in addition to the supply of services like EMI schemes to put money into gold merchandise.

“Setting up of a spot exchange, announced in the 2018 Budget on an immediate basis, will ensure consistency in pricing of gold across the country. This will boost consumer confidence and help people sell their gold at daily transparent prices,” he added.

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