Kolkata: The jewellery industry fears that artisans and small traders could face problems while moving to the technology-driven goods and service tax regime, which is expected to roll out from July this year.
The All India Gems and Jewellery Trade Federation (GJF) has approached the Centre with a plea to reconsider the proposed threshold of Rs 20 lakh for exemption under GST and to raise it to Rs 1 crore.
“The gems and jewellery industry is labour intensive and close to a crore artisans and karigars are engaged in this sector across the country,” said Nitin Khandelwal, chairman of GJF.
“Bengal is at the forefront of providing skilled artisans and it is estimated that there are close to 55 lakh individuals associated in the handcrafted manufacturing process,” he said on the side lines of the third edition of a gem and jewellery fair.
Khandelwal said the artisans, who are highly skilled in crafting jewellery that are sold not only in India but also exported overseas, are not digitally equipped to comply with all the requirements under GST.
“While large manufacturers and retailers have the means to create a digital framework necessary to comply with the indirect tax, there should be some sort of relief for small artisans. A higher threshold can help and we are in constant dialogue with the Centre over the issues that the industry might face,” said Khandelwal.
Although the Centre has not formalised the tax rate for the gems and jewellery industry under GST, the jewellery federation has proposed a 1.25 per cent GST rate for the sector.
A minimal rate is likely to not only improve revenue but also encourage compliance and discourage smuggling, according to industry officials.
The GST Council had decided on four tax rates under GST: 5 per cent, 12 per cent, 18 per cent and 28 per cent. A cess would be further applicable on goods such as luxury cars, aerated drinks, pan masala and tobacco products. However, classification of goods into different rate slabs, is yet to be finalised.
The jewellery association has also urged the Union finance ministry to consider lowering charges on credit and debit cards used for high value payments at retail jewellery outlets.