Budget expectations 2022: GJEPC seeks import duty cut on gold to 4%

Budget expectations 2022: Gems and Jewellery Export Promotion Council (GJEPC) has urged the government to reduce import duty on gold to 4 per cent from 7.5 per cent and a special package for the sector in the forthcoming Budget to boost shipments.As part of its pre-Budget recommendations, the council has also suggested a reduction in the import duty on cut and polished diamonds; cut and polished precious and semi-precious gemstones from 7.5 per cent to 2.5 per cent.

"If (gold) imported at 4 per cent duty rate....working capital amounting to Rs 225 crore would be blocked instead of Rs 500 crore," the council said in a statement. The other suggestions of the council include an amendment in taxation provisions to allow the sale of rough diamonds in Special Notified Zone in Mumbai; clarification on online equalisation levy for business to business international diamond auctions; and extension of the sunset clause for SEZ units, as it would allow the SEZ units to stay competitive in the international markets. GJEPC Chairman Colin Shah said India is the fifth largest exporter of gems and jewellery, contributing 5.8 per cent of the global gems and jewellery exports.

"We will achieve the target of $41 billion for this sector (for the current fiscal). We now target to achieve $100 billion exports when India will observe the centenary of its independence. To kickstart the same, we appeal to the government to announce a special package for the sector in the forthcoming Union Budget," Shah said. He added that the only way to further scale up this sector is through policy reforms, which will make us more competitive in the global market.

"We have requested to reduce import duty on cut and polished diamonds; permit the sale of rough diamonds in Special Notified Zone in Mumbai. This will not only help the Indian diamond industry to remain as the largest diamond producer of diamonds in the world but would also help us to become the largest diamond trading hub," Shah added. He said that the reduction in import duty on precious metals - gold, silver and platinum - would be a step towards making India "the number one" exporter of jewellery in the world.