The Gem & Jewellery Export Promotion Council today released its pre-budget wish-list enumerating the various policy changes necessary for its further growth. Through the statement, the GJEPC has sought Government support in ensuring ease of doing business, in order to help exporters to enhance exports in 2019-20.

“On behalf of the gem & jewellery industry, GJEPC seeks reduction of import duty on cut and polished diamonds as well as on cut and polished gemstones from 7.5% to its earlier level of 2.5%,” the GJEPC said in its statement put out by its Chairman Pramod Kumar Agrawal.

The organisation also asked that 5% of the FOB value of exports of cut & polished diamonds in the preceding licensing year should be allowed to be re-imported duty free by exporters.

The GJEPC added: “As part of the comprehensive Gold Policy on the anvil, GJEPC seeks reduction of import duty on gold from 10% to 4%.”

The Council also urged the Government to change Income Tax regulations to enable foreign mining companies to sell rough diamonds through the Special Notified Zone, thus paving the way for the enhancement of global and bilateral trade.

The GJEPC reiterated a long time demand of the industry – the introduction of presumptive taxation system for diamonds and gemstones in India. “The introduction of Presumptive Taxation would not only increase the ease of doing business of diamantaires but also encourage diamantaires from across the world to start operations in India as against other preferred destinations such as Belgium, UAE and Hong Kong,” the GJEPC explained. “A level playing field in India is absolutely essential for making India a global hub for gems & jewellery.”

The GJEPC also exhorted the Government for a segregation of ITC HS Code for both rough lab grown diamonds and other synthetic stones to provide for the clear differentiation between natural and lab-grown diamonds. 

Another pending request is the introduction of a job work policy in the gems and jewellery industry, as is the practice in developed markets. “Similar enabling policy for such a job work model for diamond business needs to be introduced as it is available to all other sectors,” the GJEPC stressed.

The organisation is seeking exemption from payment of IGST on re-import of goods exported during overseas exhibitions/consignments/ export promotion tours. “Such amendment should be done retrospectively to protect exporters from harassment,” the GJEPC stated.

Further, the Council urged the GST authorities to notify a GST rate of 0.25% on input services (at least job work services and grading and certification services) and extend the benefit of the inverted duty structure to such services as well.

“The procedure of apprising the exports and imports of diamonds by Customs which are subjective in nature has not changed much over the last few decades though the exports from the sector has grown manifold which is creating on ground problems for the exporters,” the GJEPC noted.  “To solve this problem and based on review of trade practices and international norms, Council would request the Government to adopt Standard Operating Procedures (SOP) for apprising exports and imports which contains the tolerance range as per justified norms adapted the trade during their regular business. Such SOP also contains Risk Management Parameters for evolving a Risk Management System for doing examination and apprising by Customs.”

The GJEPC also said it would like to see “a conducive banking environment” for exporters of the gems and jewellery sector. For this, it urged relaxation of credit norms for working capital requirements; and requested the Government to introduce interest subvention of 5% on export finance for the gem & jewellery sector.

“The GJEPC is quite hopeful that resolving the above concerns would pave the way for Indian gem and jewellery exporters to take advantage of optimistic scenario in the international markets and achieve the target of US$ 60 billion exports for the gem & jewellery industry by 2022,” the GJEPC concluded.

The gems and jewellery sector contributes 7% to country’s GDP, 13.52% to India’s merchandise exports and directly employs around five million people of the country, thus making a significant contribution to the country’s economy while maintaining its global leadership in cutting and processing of diamonds and some category of gemstones.