Mumbai: A 15-member delegation of India’s Gem & Jewellery Export Promotion Council (GJEPC) officials and industry members, led by GJEPC Chairman Vipul Shah, met Hon’ble Mr. Saurabh Patel, Finance Minister, Government of Gujarat, on Sunday November 16th. One of the important issue discussed among others was that of presumptive taxation.
For long now, the diamond industry of the country has been making representations to the Government of India to introduce Presumptive Taxation as other countries which are centres for the diamond industry have done. This will make India’s diamond industry more competitive internationally, they feel.
As a first step, the Govt. had introduced the Benign Assessment Procedure (BAP) in 2007-08 under which net profit for business of diamonds was fixed at 6 % for purposes of computation of Income Tax. However, the industry’s contention is that 6% is a very high figure as the norm within the industry for profit margins is only between 1% and 3%. So, the scheme was a non-starter. Hence, the industry has been urging the Union government to reduce the presumed net profit for manufacture and trade of diamonds in India to a maximum of 2%-3%, so that companies would be encouraged to participate in the scheme, which has largely remained on paper so far.
The Minister agreed to study the matter and make appropriate recommendations to the Union Finance Ministry.
Further, he also expressed his willingness to enter into a private-public partnership to set up a Common Facilitation Centre in Gujarat – either in Rajkot or Bhavnagar. The CFC will help increase value addition and generate employment. He expressed his government’s willingness to contribute towards land and machinery cost and asked the industry to submit a detailed proposal in order to take the matter forward.
Mr. Patel was part of a team of senior Gujarat government leaders who visited Mumbai for a road show on the “Vibrant Gujarat” event which was scheduled for Monday November 17th.