The gems and jewellery industry is pressing for the rollback of the increased basic customs duty (BCD) on imported gold in the upcoming interim Budget, while also urging the government to introduce a more streamlined tax structure.
“The jewellery industry contributes nearly 7 per cent of India’s GDP and hence, deserves a pro-business environment,” stated Saiyam Mehra, Chairman of the All India Gem and Jewellery Domestic Council, the apex body for the gems and jewellery industry.
“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 rationalised tax structure may be developed to tackle the CAD issue,” Mehra said.
He further mentioned that at present, the Basic Customs Duty (BCD) stands at 12.5 percent ad valorem, bringing the total tax on imported gold to 18.45 percent.
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He additionally appealed to the government to raise the transaction limit for PAN cards to INR 5 lakh, up from the existing INR 2 lakh, citing the surge in gold prices.
“With the rising gold rate, there is an urgent need to increase the PAN card transaction limit to INR 5 lakh from the present INR 2 lakh. A majority of consumers in rural India buy gold as an investment.
“Consumers also sell gold in case of an emergency. With the cash purchase limit of INR 10,000 per day under the Income Tax Act, consumers cannot sell gold jewellery to meet their needs. Hence, the daily purchase limit also needs to be increased to INR 1,00,000 per day,” he added.
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Moreover, the GJC has proposed the reinstatement of the EMI facility for the gems and jewellery sector.
India Bullion and Jewellers’ Association (IBJA) Director and PNG Jewellers Chairman and Managing Director Saurabh Gadgil said, “The gems and jewellery industry awaits measures to fortify the IIBX exchange, enhanced liquidity for it, so that India becomes a price maker and not a price taker.”
“Reduction in import duties on gold will ensure that unscrupulous grey market players lose their edge and start getting more organised,” he added.
