In its pre-budget recommendations to finance minister Nirmala Sitharaman, the All India Gem and Jewellery Domestic Council has sought a cumulative GST rate of 1.25 percent based on the revenue equivalence principle on gold, precious metals, gems and articles of jewellery made of such goods
Mumbai: The All India Gem and Jewellery Domestic Council (GJC) on Tuesday urged the government to reduce the rate of GST (goods and services tax) to 1.25 percent.
In its pre-Budget 2022-23 recommendations to finance minister Nirmala Sitharaman, GJC has sought a cumulative GST rate of 1.25 per cent based on the revenue equivalence principle on gold, precious metals, gems and articles of jewellery made of such goods, the apex industry body said in a statement.
Currently, the GST rate for gems and jewellery is 3 percent.
The national industry apex body has also urged the finance minister to raise the PAN card limit to Rs 5 lakh from Rs 2 lakh, as many households in rural India do not hold PAN cards and face difficulty in arranging minimum required jewellery in times of need, especially post-pandemic.
GJC has urged the government that suitable clarification be issued on the minimum quantity of gold, which an individual can deposit under the gold monetisation scheme (GMS), without being questioned by any departmental authorities.
Further, the industry body requested that the EMI facility for the purchase of 22K gold jewellery should be allowed to the gems and jewellery industry, which in turn shall lead to a substantial growth of the business of the industry after the pandemic.
“Our industry has suffered a lot during these harsh times of the pandemic, and it is also identified as one of the ‘stressed sectors’ in KV Kamath’s report.
“Hence, we have proposed changes in Section 40A of the Income Tax Act so that the existing daily cash limit of Rs 10,000 per day be increased to Rs 1,00,000 per day,” GJC chairman Ashish Pethe said.
GJC has also urged the government to waive off the bank commission (1-1.5 percent) on the purchase of jewellery through credit cards, thus ensuring a good boost to the ‘Digital India’ for the gems and jewellery industry, he said.
“We are confident and hopeful that there may be good reliefs announced for our industry during the Budget session,” Pethe added.
GJC also urged the government that in case jewellery sold is reinvested in new jewellery, the exemption from capital gain as per Section 54F of the Income Tax Act 1961 should be extended to the gems and jewellery industry.
This will help the industry to move towards organized and compliant business practices, it added.
On making the GMS more effective, GJC emphasised that the government must give exemptions to households for minimum 500 grams of gold deposited, being of ancestral nature, from questioning by any tax department.
The same will make GMS more effective and benefit the government and participants at large, GJC added.
The total deposits accumulated by the banks under the GMS are at around 11.1 tonnes, which is a meagre number as compared to the estimated holdings of 23,000-24,000 tonnes, the industry body stated.