Mumbai: All India Gem and Jewellery Domestic Council (GJC) has sought reduction in Import Duty on Gold as per of its pre-Union Budget recommendations. GJC Chairman and delegation submitted the pre-Budget recommendations to the Hon. Union Finance Minister. The indigenous Gem & Jewellery industry is predominantly hand crafted and labour intensive. Over 1 crore skilled labour force is engaged in manufacturing of jewellery in the domestic sector.
Mr. Anantha Padmanaban, Chairman, GJC, said, “The 10% Import Duty on gold was levied to curb Current Account Deficit. However, India’s trade deficit narrowed to 2.5% of GDP in 2019. Reduction in the gold duty will directly reduce other social & economic menace in the country. GJC has suggestions to make the Gold Monetary Scheme more effective and benefit the government and citizens at large. GJC has proposed key customer-friendly initiatives such as exemption from Capital Gains; enhancement of cash limits and PAN Card limits; extension of EMI facility and availability of NEFT/RTGS on weekends.”
To unlock family gold reserves of up to 24,000 tonnes and help reduce CAD, GJC urged that Government must give exemptions to households for minimum 500 grams of gold deposited under Gold Monetary Scheme (GMS), being of ancestral nature, from being questioned by any tax department.
Mr. Shaankar Sen, Vice Chairman, GJC, said “With respect to credit card commission levied by banks, we have urged the Govt. to waive off the bank commission or reduce it to 0.20% thus ensuring a good boost to the ‘Digital India’ for the G & J Industry.
We also request 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 the extended to G&J Industry. This will help the industry to move towards organized and compliant business practices. In case of remaking of new jewellery from old jewellery or old gold, GST is applicable @18% on labour charges. Due to high rate of GST, the customers are reluctant to go for this option. The other option left with customer is to sell the old jewellery and buy new jewellery. However, as there is Capital Gains Tax involved, customers are hesitant for this option also.”
Keeping in mind the hardships faced by the common man during such crisis, GJC urged that the limit of Rs. 10,000/- per day be increased to Rs. 1,00,000/- per day Currently, the monetary limit on revenue expenditure or purchase limit in cash is Rs. 10,000 per day. Most of the people in Rural India prefer Gold as an Investment and have their savings in the form of Gold. In case of Medical / financial emergencies they approach the jeweller to liquidate their savings or investment. But due to provisions contained in Section 40A of the Income tax Act, a jeweller is unable to make payment above Rs. 10000/- in cash.
GJC recommends raising PAN card limit from Rs. 2 lakh to 5 lakh. Many households do not hold PAN cards specially agriculture sector. Hence, they face difficulty in furnishing the same upon requirement.
GJC urged the Government that the facility of EMI should be extended to the Gems & Jewellery industry since the Finance Minister in the 2018 Budget has announced as an Asset Class. Currently, loans on purchase of jewellery is being treated as Personal Loans, where the rate of interest is very high. EMI should be available for purchase of jewellery and restriction should continue only for bullion and coins. This will help the industry to move towards organized and compliant business practices.
In the recent past, it has been observed that more transactions are happening online. Also, most of the buying takes place on Sundays and public holidays where Banking channels like NEFT / RTGS are not available. GJC urged that the NEFT/RTGS facility should be available on holidays and Sundays when there is maximum buying by the customers.
GJC has also sought easier bank financing norms for small & medium scale jewellers. GJC requested the Govt. to enable jewellers to sell Ashoka Chakra gold coins through retail stores. This will increase the reach and generate more sales of the coins.
The tax rate for Body Corporate with annual revenue of less than Rs. 250 crore a year was reduced to 25% from 30% in the last Budget. A majority of the players in the Gems & Jewellery Industry are either Partnership (Including LLP) or Proprietorship firms. GJC urgeed the Government to extend the benefit of reduced Income tax rate to even Partnership (Including LLP) or Proprietorship firms. In order to promote manufacturing in this sector and support ‘Make in India’ initiative of Government of India, jewellery manufacturing machines import duty should be 0%.
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