The Gem and Jewellery Export Promotion Council (GJEPC) is hoping for a reduction in import duty on polished diamonds to 2.5 per cent from the current 7.5 per cent and a cut in import duty on gold from 10 to 4 per cent in the upcoming Interim Budget.
“If India wants to be a serious manufacturing and trading hub, with such high duties it can never be one. Now it is up to the government to decide whether we want to take manufacturing seriously or not,” said Colin Shah, Vice- Chairman, GJEPC.
Income tax relief for mining companies is another expectation. Shah said all the mining companies pay taxes in the country in which they mine. These companies want to start offices in India and sell directly to the manufacturers, but the current policy does not allow them to do so. While there are special notified zones where these companies can bring samples, they cannot bring their rough diamonds and sell it here because they need to pay income tax, said Shah. This deters mining companies from coming to India, which is not good for the manufacturers here. “There needs to be a progressive taxation policy for at least the mining companies... because most of the raw materials are not made in India,” he said.
The HS code for lab-grown diamonds is another “big threat” to our industry, said Shah. He said the code for imports should have been separated for lab-grown and natural diamonds long back.
A risk management system and an SOP based on business practices all over the world also needs to be implemented, he said. A 5 per cent interest subvention has been given to several export industries in the last couple of months, but the gems and jewellery industry is not a part of it, he said. “If the government is giving an incentive to other exporters, then why is it that only our industry is left out?” asked Shah. Removal of IGST on goods for exhibitions and re-import is also another expectation from the Budget.
A proper implementation of the Baba Kalyani report on SEZ and the conversion of SEZ into a manufacturing zone is also needed. “Right now, we can only export. India being such a large market, we should be allowed to export as well as sell domestically from the same factory,” said Shah.
Source :- Thehindubusinessline.com