Mumbai: The apex body for domestic gems and jewellery industry All India Gems and Jewellery Trade Federation (GJF) Director Mr. Ashok Minawala and delegates from Maharashtra, met Maharashtra Finance Minister Mr. Sudhir Mungantiwar at Nagpur and submitted their representation on GST.
GJF has proposed GST rate of 1.25% for the gems & jewellery sector. GJF sought minimal GST rates even as the GST Council commenced a crucial 3-day meeting to set rates.
As the introduction of Goods and Services Tax (GST) will be a landmark indirect tax reform, (and will replace the present indirect tax structure), GJF has proposed that the GST Council should consider the recommendations of the Sub-committee of High Level Committee (HLC) constituted by the Government (and headed by Dr. Ashok Lahiri) to deliberate on levying excise duty on the unorganised gems & jewellery sector. The representations made by the G&J sector to the High-Level Committee were unanimously accepted and accordingly notifications and circulars were issued.
Mr. Sreedhar G. V. Chairman, GJF, said, “GJF is now gearing up for the forthcoming GST era and has proposed that the GST rate for the gems & jewellery sector should be 1.25% if the govt expects the industry to be compliant and organized. GJF shall be sending the representation to FM on GST, highlighting various concerns of the sector. GJF has been constantly highlighting various contentious issues such as smuggling of gold & increasing PAN card limit for purchases, lack of hallmarking infrastructure and high customs duties on raw material gold. It is also important to mention the business characteristics of the gems & jewellery sector that were studied and considered by the HLC and even acknowledged by various departmental officials including Hon’ble Union Finance Minister and accordingly appropriate rules were incorporated in the Central Excise provisions considering the multi-facetted complex business practices prevalent in the sector.”
Mr. Ashok Minawala, Member-High Level Committee (HLC) on excise duty, Director – GJF, said, “It is important to mention that the Hon’ble Prime Minister of India Mr. Narendra Modi, during his address to the industry at Vigyan Bhavan on 23rd July, 2016 acknowledged that the Government became aware about the characteristics of the sector for the first time only through the findings of the HLC report. The High-Level Committee Report, which was unanimously accepted by the Government, was prepared after taking the suggestions and recommendations from more than 60 associations of India into consideration. Keeping in mind, the unique characteristics of the gems & jewellery sector, the kaarighars and small jewellers were kept out of purview of the Excise Duty. Therefore, while we welcome GST we request the GST Council to kindly recognize the practical issues faced by the sector as highlighted in the HLC Report.”
GJF is closely evaluating the implications of Model GST Law and has already started mapping the business practices of the sector with the Model GST Law and Draft GST Rules. On a preliminary review of the Model GST Law and Draft Rules issued in the public domain, it is understood that if the same are finalized in its present form the same would give rise to significant issues on the G&J sector and would also undo the business considerations accepted and adopted by the Government during the excise duty levy.
