The Gem & Jewellery Export Promotion Council (GJEPC) released a pre-Budget wish list listing the various policy changes required for the growth of the industry. The GJEPC has sought government support in ensuring ease of doing business to help exporters to enhance exports in 2019-20.
“On behalf of the gem and jewellery industry, the GJEPC seeks a 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%,” GJEPC chairman Pramod Agrawal said in a statement.
The Council noted that 5% of the Free on Board (FOB) value of exports of cut and polished diamonds in the preceding licensing year should be allowed to be re-imported duty-free by exporters.
“As part of the comprehensive Gold Policy on the anvil, GJEPC seeks reduction of import duty on gold from 10% to 4%.
To enhance global and bilateral trade, the GJEPC also urged the government to change Income Tax regulations enabling foreign mining companies to sell rough diamonds through the Special Notified Zone.
Emphasising its long-pending demand for the introduction of a presumptive taxation system for diamonds and gemstones in India, the GJEPC said, “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. A level playing field in India is absolutely essential for making India a global hub for gems and jewellery.”
The GJEPC also requested the government for a segregation of ITC HS Codes for rough lab-grown diamonds and other synthetic stones to earmark clear differentiation between natural and lab-grown diamonds.
“GJEPC seeks introduction of job work policy in the gems and jewellery industry as is the practised norm in developed markets. A similar enabling policy for such a job work model for the diamond business needs to be introduced as it is available to all other sectors.”
The GJEPC is seeking an exemption from payment of Integrated Goods and Services Tax (IGST) on re-import of goods exported during overseas exhibitions/consignments/ export promotion tours. Such an amendment should be done retrospectively to protect exporters from harassment, it noted.
The Council also called on 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 benefit of inverted duty structure to such services.
The GJEPC explained that the procedure of appraising exports and imports of diamonds by Customs is subjective in nature, and has not changed much over the last few decades; this, even though exports from the sector have grown manifold, which is creating onground problems for exporters.
“To solve this problem and based on a review of trade practices and international norms, the Council would request the government to adopt Standard Operating Procedures (SOP) for appraising exports and imports, which contains the tolerance range as per justified norms adapted by the trade during their regular business. Such SOP also contains Risk Management Parameters for evolving a Risk Management System for doing examination and appraising by Customs.”
The GJEPC said it was necessary to have a conducive banking environment in terms of relaxing credit norms for working capital requirements for exporters of gems and jewellery. “We also urge the government to introduce interest subvention of 5% on export finance for the gem and jewellery sector.”
The GJEPC is quite hopeful that resolving above concerns would pave the way for Indian gem and jewellery exporters to take advantage of the optimistic scenario in the international markets and achieve the target of $60 billion in exports for the gem and jewellery industry by 2022.