All India Gem & Jewellery Domestic Council (GJC), a national apex body for the gems & jewellery industry, have urged the Union Finance Minister Nirmala Sitharaman to withdraw the Basic Customs Duty on gold and also GST on the gems & jewellery industry.
In 2022, the Basic Customs Duty (BCD) on the import of gold was increased from 7.5% to 12.5% ad valorem. This takes the total tax incidence to 18.45% on the imported gold. The reasons for the hike in BCD, as publicly available, seem to indicate concerns in relation to the Current Account Deficit (‘CAD’) and the impact that the import of gold has on the CAD.
Mr Saiyam Mehra, Chairman of GJC, stated, “The jewellery industry contributes nearly 7% of India’s GDP and hence, deserves a pro-business environment. This will also benefit the Government. We urge the Finance Ministry to withdraw the increase in BCD on gold in the upcoming Union Budget and a rationalized tax structure may be developed to tackle CAD issue. "
"A majority of consumers in Rural India buy Gold as an Investment for the future. They sell gold in case of a medical emergency. Hence, the daily purchase limit needs to be increased to Rs 100,000 per day."
Mr Rajesh Rokde, Vice Chairman of GJC, said, “There is an urgent need to revamp the Gold Monetisation Scheme (GMS) to attract more investment as this scheme The government must expand the number of bank branches to accept gold deposits under the GMS. Consumers in rural India consider the purchase of gold as a safe investment which is normally monetized in the urgent needs such as medical emergency or education purposes."
Additionally, GJC has also recommended the facility of EMI to be restored to the Gems and jewellery industry as allowed a few years ago which will lead to substantial growth of the business of the industry and also promote digital payments in the industry.The majority of the Gems and jewellery sector falls under the MSME category and availing of loans has become a key concern for the jewellers, with the rise in gold price.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
