Gems & Jewellery sector seeks special GST rates

Sairaj Iyer

G.V. Sreedhar, the outgoing chairman of the Gems & Jewellery Federation said 1.25%-1.3% is an ideal GST rate for gems and jewellery traders in the country. He averred that his federation would like the GST to be around 1.25%, although the industry demands differ ranging from 5%-18%. He pointed out, “We have been very clear from the beginning that VAT should be 1%, and excise tax should be 1%, put together it is 2%. But then 85-90% of our trade is out of excise and considering that revenue, the total value of GST should be 1.2-1.3%. We have given our representation to the government.”

According to him, lower tax slabs will percolate into higher revenues, better compliance and organised in an efficient manner. “After the issue of excise, we are facing GST now. We have a problem in hallmarking with GST, wherein we will face issues with labelling even full stops and commas matter because each of these connotes different meanings,” he added.

Sreedhar was speaking at a change of administration session of the Gems and Jewellery Federation, in Mumbai. Nitin Khandelwal, the new Chairman at GJF highlighted that there is a need to energise and channelize jewellers across India to a new normal in a rapidly evolving cashless and digital India. “The new challenges include newer tasks such as transition into a GST-regime and tax compliant economy and with the existing ones to create new markets in order to sustain profitable growth.”

Ajay Sancheti, Member of Parliament (Rajya Sabha), was invited as a chief guest at the session. Sancheti, a BJP MP, hails from Nagpur and has been a member of the GST select committee entrusted with the task of introducing the Bill in the Parliament. He pointed out that the Finance Minister is a “pro-business” man and challenges such as Pan Card restrictions on trading were brought down in a systematic manner. He felt that trade’ issues will be best resolved by the finance minister. When the government came to know of the challenges of PAN transactions, it decided to bring down the transaction limit to 2 lakh, although it had envisaged Rs. 1 lakh. “In fact, it was brought down in a phased manner, and held for 8 months to avoid any disruptions to the trade,” he shared.

His comments can be taken diplomatically as the current budget is a pro-poor one, and hence there could not be much that gold traders could expect. “All the notices have been brought up on a forum, and you will get to hear straight from the horse’ mouth after the session completes business on the 9th of February,” he added.

It should be recollected that the jewellers opposed the Central government's imposition of 1% excise on non-silver jewellery and had shut down the operations of their businesses in 2016. The current GST has confused many in the trade. “Only time will tell us the rates. Until then, we are in a confused state,” shared Shantibhai Patel, President of Gem & Jewellery Trade Council of India.