Its budget time for India so all eyes are set on Finance Minister (FM) of one of the largest democracies of the world. Every industry including the gem & jewellery is expecting some budgetary boost that can give fillip to various ailing industrial sectors.
It is customary on part of every industry in India to present a charter of demands to the FM who, if needed gives a hearing to the representatives of the concerned industry to consider their demand sympathetically. Chairman of the Gem & Jewellery Export Promotion Council
(GJEPC) Mr. Rajiv Jain has, in consultation with his committee members also prepared a list of some demands and presented it to the FM.
The GJEPC has identified some vital areas which require to be considered by the Indian government to boost growth of the Indian gem & jewellery industry
. The GJEPC hopes the demands would be considered sympathetically in the forthcoming Indian budget.
The first and foremost demand of the GJEPC is to implement the Presumptive Tax which was earlier recommended by the Sivaraman Committee in 2006 but the Indian government has till the date failed to implement the same. On the contrary, it introduced a provision called “Benign Assessment Procedure” in 2007-08 which has received a poor response from the industry.
In a highly emotional plea to the government, Mr. Jain has sought positive initiatives from Govertment for simplification of tax regime in the forthcoming budget. Highlighting the contribution of the entire Gem &Jewellery industry
, not only to the generation of high employment in the country but also towards making India into the world’s leading Gem & Jewellery hub, he appealed to the government to remove tax related strangleholds that are preventing the industry from growing at a healthy and desired pace.
In other parts of world such as Belgium
that were faced with similar challenges in tax collection, Presumptive Tax regime was successfully implemented and that helped the countries emerge has one of the largest diamond processing and trading hubs in the world.
As per the Sivaraman Committee’s recommendations, the introduction of a Presumptive Tax system would encourage more investment in the sector, retain trade, skilled labour and capital within the country, enable voluntary compliance leading to increased revenue, enhance global competitiveness of the Indian industry and foster increased employment opportunities.
In its latest appeal, the industry has demanded for the withdrawal of the Benign Assessment Procedure and the acceptance of the Sivaraman Committee’s recommendation. The GJEPC recommended that the prescribed rate to be reflective of the reality in the diamond manufacturing and trading industry which is in the range of 1% to 3%.
The other issues to which the GJEPC is seeking solutions are as follows:
• Import duty reduction on Machineries from 10% to 5%
• Import duty reduction on Worked Coral from 24.42% to 0%
• Import Duty Reduction on Rhodium from 2% to 0%
• Income Tax Exemption to all Export Promotion Councils
• Amendment in the Income Tax Act 1961-Trading in derivatives in specified stock exchanges will not be treated as “speculative transactions for the purpose of Income Tax Act
• Withdrawal of 1% Excise Duty on Branded Jewellery
• To allow import of rough diamonds on consignment basis from mining companies like Alrosa, De Beers, etc .
• Reduction of Interest in export sector in Rs terms
• Availability of Dollar financing to exporters.
The industry is eagerly waiting for India’s Union Budget which would be presented on 16th March 2012 by the FM in Parliament.