Gems, jewellery breathe easy as Budget 2013 spares it of duty hike
Posted on: 05:59 PM IST Feb 28, 2013
Mumbai: Gems and jewellery sector on Thursday heaved a sigh of as there is duty hike in gold or jewellery in Budget 2013-14. "We thank the Finance Minister for accepting our demand by not increasing the Customs duty on gold and not levying Excise or any other duty on gold jewellery. We accept the Budget with a positive attitude," Bombay Bullion Association President Mohit Khamboj said.
Gitanjali group Chairman Mehul Choksi said the Finance Minister was very wise in not increasing any duty as any hike would have increased smuggling and other such illegal activities.
It may be recalled that RBI and a wider section with the government were calling for more disincentives to discourage people from buying gold as the yellow metal import has been a big drain on forex. This in turn has led to higher current account deficit, which rose to 5.4 per cent in the September quarter.
During this fiscal, the government has increased duty on gold imports twice to 6 per cent from the earlier 2 per cent. "At present the duties are at borderline and there is a need to relax much more. However, no hike in duties from the current level will help curb smuggling and help the government in getting direct tax, which is a positive thing," Choksi added.
Similarly, All-India Gems & Jewellery Trade Federation Chairman Bachhraj Bamalwa said the industry was very relaxed with the Budget as it has not imposed any fresh import duties. "We were expecting further restrictions and duty hikes. We are very relaxed as there is no such move. We welcome the move on reducing of duty on pre-forms of precious and semi-precious stones from 10 per cent to 2 per cent," he said.
However, Gems and Jewellery Export Promotion Council Chairman Vipul Shah said the budget was below his expectations as it provided only some corrective measures for the import duty for preform precious stones and was eagerly waiting for the reforms announcements by the Foreign Trade Policy, which may be supportive of the sector. "Commerce and Industries Minister Anand Sharma accepted the task group report to make the country an international trading hub for rough diamonds.
"Some of the recommendations in report include setting up of a special notified zone for imports and trading of rough diamonds, a 15 per cent duty free re-import quota for import of cut and polished diamonds and reducing the benign taxation rate from 6 per cent to 2.5 per cent, among others," he said. "The industry has commended the proactive role of the government in trying to solve the industry-specific issues and anticipates that measures to boost exports will be announced soon," he added.