Industry expects budget to bring down gold import duty to 5%
Buoyed by commerce minister’s recommendations for lowering gold import duty, the country’s gems and jewellery sector hopes that the budget would bring the duty down to five per cent. It also wants the government should not insist PAN card details for cashless gold and jewellery purchases.
“On behalf of GJF and the entire gems and jewellery industry, we welcome the suggestion from the commerce ministry to reduce the import duty on gold. The high import duty on gold at 10 per cent has been adversely affecting the industry. This has built a parallel economy, leading to wide scale gold smuggling. It is also affecting domestic retail and manufacturing industry adversely. Bringing down the import duty would eliminate smuggling and the employment of any black money in this process. The reduction in import duty will also promote cashless transactions across India, and also help the industry become more organised and compliant,” said Sreedhar GV, chairman, All India Gems and Jewellery Trade Federation.
“We wished the duty was reduced to two per cent, but hope that import duty will be lowered to five per cent in the coming budget,’ he added.
Commerce minister Nirmala Sitharaman recently said that the ministry has made recommendations to bring down the duty on gold. “I have been talking about cutting the duty as gold is a critical raw material for gems and jewellery sector. Restriction-free gold import also discourages smuggling,’ she had said.
"Rationalisation of customs duty on gold has been a long standing demand of council. We further feel that inputs going into jewellery such as diamonds and coloured gemstone should be zero rated. Also, GST should be applicable only for jewellery sold in the local market at the point of sale," added Praveen Shankar Pandya, chairman, Gem and Jewellery Export Promotion Council.
Meanwhile, the industry also found that there is no need to insist on PAN card details for cashless gold and jewellery purchases. It wants PAN card details only to be mandated for cash transactions.
The government had proposed to make PAN card details mandatory for high-value gold purchases in its budget in 2014-15. From January 1, 2015 onwards PAN card details had to be furnished for purchases above Rs 2 lakh. According to the industry, several customers felt it intimidating to give PAN card details for jewellery purchases. Industry found that this would further drive away customers from organised jewellers who bill their transactions. It has been asking the government to increase the purchase limit to Rs 5 lakh.
The demand for gold and jewellery has been coming down since the beginning of 2016 and furnishing of PAN card details was one among several reasons why there was lesser demand for gold.
Sangeetha G.