Standardising the operating procedures of Indian gem & jewellery industry can become a game changer for the sector as per Mr. Nishant Shah, Senior Partner at Economic Law Practice (ELP). Shah was addressing the attendees on the inauguration day (4th January) of IIJS Signature 2024 at Jio World Convention Centre.
Shah stated the fundamental purpose of SOPs is to bring about consistency and uniformity in the manner in which records are maintained documents are created and tax positions or various legal positions are taken across the country. This will become ease of maintenance, ease of record maintenance, ease of audit assessment, etc., he said.
The gems & jewellery industry has complex structures with multiple transactions. Shah remembered his interview with a company executive who said that it was really difficult to explain to them that a jeweller does not necessarily buy fresh gold. It could also be that he gets old gold from any customer who wants to convert it into a new jewellery or he may have jewellery he may give jewellery in exchange immediate gold is not necessarily indicating the cash consideration the value is identified. So because of the manner in which the transaction is carried out, there are a lot of complexities. There are a lot of diversities that a lot of variations. Jewellery is at a different rate. But making is at a much higher rate. Everybody has a different style of getting credit. Everybody has a different style of entering into transactions.
Once the entire industry or at least a significant portion of the industry starts following the SOP, there will be consistency across the country. Because today what is happening is that some jeweller somewhere ends up taking the wrong position and ends up paying a higher value of tax or a higher value of GST. Shah also stated that they also intend on publishing translated versions of the SOP in certain regional languages shortly.