GJF appeals for gold import duty reduction to 4 percent

Govt should lower lending rates, introduce industry-friendly hallmarking regulations: GJF chairman

Jewellers are waiting for the declarations of the upcoming budget in February and the All India Gems and Jewellery Trade Federation (GJF) has sent its recommendations to the Finance Ministry.

The recommendations of GJF, the country’s apex body for jewellers, aim at uplifting the business sentiment and reducing the burden of government restrictions on small and medium jewellery retailers.

The foremost demand of GJF is the reduction of import duty on gold from 10% to 4%. The appeal aims at prevention of gold smuggling, boosting rural lending of money against gold and making the industry organized and compliant.

In addition to import duty, the federation also promoted services of unregistered job workers and change in laws relating to repairing jewellery. “Principals registered under GST Act should be allowed to take services from unregistered job workers who have turnover of below Rs 20 lakhs in a financial year. Also, the definition of job work in the form of repair, alteration and modification should be broadened so that customers bringing jewellery for repair are not charged a high GST of 18% solely as compared to a modest 5% tax when the same jewellery is procured by a registered job worker. This confusion hurts a consumer and the jewellery business,” says GJF chairman Nitin Khandelwal.

An important issue addressed by the federation includes either exclusion of gold in any free trade agreement or imposition of 15% duty on gold articles. Mr Khandelwal cited unlawful practices of turning gold utensils imported at 0.96% duty from South Korea, Indonesia into bullion and then selling at 10% import duty.

GJF has also suggested a thorough modification of hallmarking rules. Lack of technology in sub-urban centres, accountability, extension of caratage limit and a low registration fee for hallmarking jewellery would make more jewellers interested in maintaining purity and trust in their products. Hallmarking centres should be responsible for assuring quality and not rest the blame on retailers and manufacturers. Another major issue has been that of the government keeping some towns out of the purview of hallmarking, which should also be solved.

Business-to-customer exhibitions are increasingly becoming popular among jewellers who face several hurdles if they want to sell a product in a state they are not registered with. Being a casual taxable person, they have to send goods under an approval memo as a casual taxable person and also, pay GST in advance under estimated tax liability. This should be dispensed with, says the GJF chairman.

“RBI credit ratings should improve, and jewellers and bullion traders should be treated positively. In line with the ‘Make in India’ campaign, the government should reduce lending rates so that Indian jewellery companies can compete internationally. The same should apply for gold loans so as to help domestic manufacturers compete abroad. Another important step would be to let gold mines be accessible to private companies with the desired technology and infrastructure. This will lead to more employment opportunities and the burden on import would ease,” added the GJF head.

Courtesy: Retail Jeweller India News Service