The India Bullion and Jewellers Association (IBJA) and the India Gems & Jewellery Trade Federation (GJF) have both called for strikes in the country’s gem and jewelry sector in response to the levying of excise duty on jewelry that was declared in the recently announced budget, report local news services.
India’s Finance Minister Arun Jaitley announcement of an excise duty of 1% without input tax credit or 12% with input tax credit on articles of jewelry (excluding silver jewelry, other than studded with diamonds and some other precious stones) has given rise to widespread disappointment amongst the country’s gem and jewelry sectors.
“We are apprehensive of the introduction of excise duty on jewelry products for the first time in several decades. In India, jewelry is largely produced by the SMEs and they are not equipped to follow the rigid compliance of excise norms. The imposition of excise would severely impact jewelry production in India resulting in loss of employment to the uneducated but skilled jewelry workers. In the past, successive Governments have considered this and not levied excise on jewelry,” explains Chairman of India’s Gems and Jewelry Export Promotion Council Praveenshankar Pandya.
In another response to the country’s budget, the GJEPC welcomed the Inclusion of Separate HS Code for lab grown diamonds and a separate one for natural diamonds. “This is a great step towards curbing the mixing of lab grown with natural diamonds and thereby creating a fair trade environment with defined verticals for both,” says Pandya.
A ‘Special Notified Zone’ (SNZ) had been created to facilitate shifting of operations by foreign mining companies (FMC) to India and to permit the trading of rough diamonds in India by the leading diamond mining companies of the world. “GJEPC acknowledges the step of incorporating the FMCs to undertake activity of display of uncut diamond (without any sorting or sale) in the special notified, however industry urges the government to permit the sale of rough diamonds at the SNZ by implementing 0.25% tax on sales turnover achieved at SNZ by Foreign Mining Companies,” concludes Pandya.
