In the upcoming Union Budget, the gems and jewellery sector has urged the government for a reduction in goods and services tax (GST) to 1 per cent on revenue equivalence ratio to ease the cost burden on the industry.The current GST on the Gem and Jewellery is 3 per cent.Both natural and lab-grown diamonds are taxed at the same GST rate.
All India Gem and Jewellery Domestic Council (GJC) Chairman, Rajesh Rokde, in a statement said, “We seek rationalisation of taxes and availability of finance to support business.” With the continuously increasing gold rates, the current rate of GST is increasingly becoming a burden for the industry and end customers, he said.
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GJC said there is a need to introduce a concessional GST rate for lab-grown diamonds to fully recognise their sustainable and cost-effective attributes compared to natural diamonds.The Chairman said the tax reduction will enhance affordability for consumers, especially in rural areas, and most importantly, improve revenue collection by increasing the size of the formal economy.The body further asked the government for a dedicated ministry and urged for state-wise nodal offices and appointment of a central minister specifically for the jewellery sector.
GST is imposed on the sale of gold in various forms.Gold bars or gold jewellery fall within the definition of ‘Goods’ as per the GST law. Under Section 7 of the CGST Act, the supply of gold (without any job work) is considered the supply of goods.
