GJEPC asks government to abolish duty on gemstones imports

The Dollar Business Bureau The Gem and Jewellery Export Promotion Council (GJEPC) has urged the government to remove import duty on cut and polished coloured gemstones, reduce import duty to 2.5% on processed pearls, and establish a Special Notified Zone (SNZ) for trading of rough diamonds to help boost exports of Gems and Jewellery from India. The Gem and Jewellery sector is a key export-oriented sector in India which has helped the country become the hub for Gems and Jewellery in the international market. Overall exports from this sector have increased from $28 million in FY1966 -67, when GJEPC was established, to almost $35 billion in FY2013-2014. However, exports have declined in the recent years. India’s exports in FY2013-14 are down about 18.6% from a high of around $43 billion seen in FY2010-11.

Source - GJEPC

Presenting his pre-budget recommendations to the government, Vipul Shah, Chairman, GJEPC informed Arun Jaitley, Finance Minister, that the Gem and Jewellery export community is going through a challenging period due to the global economic slowdown and decline in demand in China, according to gjepc.org. Shah said, “At such times, export-oriented industries require additional support and assistance from the government.” Shah said that the government should simplify Income Tax procedures by introduction of a Presumptive Taxation system or decrease in percentage of net profit to 2% in the notification of Benign Assessment Procedure to help the industry. There is also a need to clarify the applicability of import duty or service tax on import of Sarine machines for diamond cutting, on software and other good required by the industry, he said. Shah said that to ensure equitable distribution of gold to small exporters in India, the government should consider remodelling of the Duty Drawback on gold exports by considering import duty at the time and point of exports of jewellery.    

This article was published on January 8, 2015.