January 28, 16
(IDEX Online News) – A delegation from the Gem and Jewellery Export Promotion Council (GJEPC) has met with the Union Minister of Finance, Shri Arun Jaitley, to discuss some of the critical issues facing the gems and jewelry sector in India and to offer their solutions.
During the meeting, which was led by GJEPC chair Praveenshankar Pandya, the group requested the introduction of a Special Turnover Tax regime for the diamond industry with 0.75 percent tax on sales turnover (computing net income as 2.5 percent of turnover, available up to 6 percent of income) as is common in Belgium and Israel.
According to GJEPC, such an approach would be tax neutral and encourage companies in Belgium and Dubai, especially those run by NRIs to shift their manufacturing to India, which is currently taking place in China.
The GJEPC chair also urged the government to permit the Sale of Rough Diamonds at the SNZ in Mumbai by implementing a 0.25 percent tax on sales turnover achieved at SNZ by foreign mining companies. This, he pointed out, would generate a new area of tax collection by shifting such sales from Belgium, Israel and Dubai.
“By attracting international manufacturing business to India… we can tap an additional market share of approximately around $20 billionn (in FY 2018-19) thereby helping the government garner more tax collection in the long run. This will also help create jobs for 1.56 million Indians by 2018-19 in the gems and jewelry sector while preserving skill and talent of our labor force. This will help in tackling trade deficit and current account deficit through higher exports,” said Pandya.
The chairman also urged the government to include the gem and jewelry segment under the Interest Subvention Scheme and Merchandise Exports from India Scheme (MEIS). He said that the gold jewelry sector had huge potential, and suggested that jewelers should be involved under the government’s Gold Monetisation Scheme.
He also said that the current 2 percent difference between import duty on gold dore bars and gold bars was too high and suggested it should be brought down to 0.25 percent.