The All India Gem and Jewellery Domestic Council (GJC) has urged the government to reduce Goods and Services Tax (GST) on the sector from the current 3% to 1% on a revenue equivalence ratio. The appeal comes ahead of the Union Budget, with the aim of easing cost burdens and encouraging compliance within the industry.
In a statement on Tuesday, the GJC Chairman emphasized the need for tax rationalization and increased access to finance to support the sector. Highlighting the challenges posed by rising gold prices, the Chairman stated, "The current GST rate is becoming an increasing burden for the industry and end consumers."
Reducing GST to 1%, according to the GJC, would make jewellery more affordable, particularly in rural areas, while simultaneously boosting revenue collection by expanding the formal economy.
Additionally, the GJC recommended a concessional GST rate for lab-grown diamonds, citing their sustainable and cost-effective advantages over natural diamonds. Currently, both lab-grown and natural diamonds are taxed at the same rate, which the council argues does not reflect their differences.
The industry body also reiterated its longstanding demands, including the introduction of EMI options for jewellery purchases and a revamp of the Gold Monetisation Scheme to unlock idle household gold, reduce imports, and promote self-reliance.
The GJC Vice-Chairman further called for the establishment of a dedicated ministry for the gems and jewellery sector, state-wise nodal offices, and the appointment of a central minister to address the industry's specific needs.
With the Union Budget approaching, the sector hopes that the government will address these recommendations to support growth, enhance compliance, and reduce costs for consumers and businesses alike.
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