The Gems & Jewellery sector plays a pivotal role in India’s economy, contributing significantly through exports, job creation, and the preservation of cultural heritage. It is also a major job creator and stands as India’s second-largest Foreign Exchange Earner (FEE). However, the industry faces numerous challenges, including complex taxation, stringent compliance requirements, and limited access to finance. To address these issues, the All India Gem & Jewellery Domestic Council (GJC) has released a detailed note outlining actionable recommendations to unlock the full potential of India’s gems and jewellery sector.

In a pre-Budget representation to Union Finance Minister Nirmala Sitharaman, GJC has urged a reduction in the Goods and Services Tax (GST) on gems and jewellery from the current 3% to 1% on revenue equivalence ratio to ease the cost burden on the industry and, eventually, on consumers. Additionally, there is an urgent need to introduce a concessional GST rate for lab-grown diamonds to fully recognize their sustainable and cost-effective attributes compared to natural diamonds. Currently, both natural and lab-grown diamonds are taxed at the same GST rate.

Furthermore, given that the jewellery industry does not have a dedicated ministry, GJC also urges the Government to establish state-wise nodal offices and appoint a Central Minister specifically for the jewellery sector. This structure would help organize the industry more effectively encourage positive growth in the domestic sector and also compliment exports.

The jewellery sector in India is predominantly made up of small and medium enterprises (SMEs), including family-owned jewellers, with approximately two-thirds of the overall industry business driven by them. Therefore, addressing their challenges is crucial.

Rajesh Rokde, Chairman of GJC, commented, “With over 20 years of experience representing industry stakeholders, GJC serves as the bridge between the government and the trade. We work tirelessly for the overall growth and betterment of the industry. We therefore seek rationalisation of taxes and availability of finance to support business. With the continuously increasing gold rates, the current rate of GST is becoming increasingly burdensome for the industry and end customers. Hence, we humbly request a reduction in GST, which will encourage compliance. Additionally, the tax reduction will enhance affordability for consumers, especially in rural areas, and most importantly, improve revenue collection by increasing the size of the formal economy.”

Avinash Gupta, Vice Chairman of GJC, said, “We request the Government to consider the EMI on Jewellery, which has been a long-standing demand of the industry. Doing this, will also promote the vision of our Honourable PM ‘Digital India’. Gold Monetisation Scheme (GMS) also needs a revamp as it has the potential to unearth the idle household gold in the economy and thus helping us to be self-reliant and promote less imports. As an apex body of the gems & jewellery industry, GJC has the detailed roadmap for successful implementation of GMS, and we can assist the Government in implementing it across the nation.”

Courtesy: AOJ Desk News