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Budget 2025: The gems and jewellery sector has urged the government for a reduction in goods and services tax to 1%
Budget 2025: Finance Minister Nirmala Sitharaman will present the Union Budget on Saturday, February 1, 2025, at 11:00 AM IST. (File photo)
Budget 2025 Expectations: The gems and jewellery sector has intensified its plea to the government, urging a substantial reduction in the Goods and Services Tax (GST) rate to 1 percent on revenue equivalence ratio in the upcoming budget. The industry argues that the current GST rate poses a significant cost burden, hindering its competitiveness and impacting employment within the sector.
Industry’s Call for Tax Rationalisation
“We seek rationalisation of taxes and availability of finance to support business,” the All India Gem and Jewellery Domestic Council (GJC) Chairman Rajesh Rokde said in a statement on Tuesday.
‘Impact of High Gold Rates on GST’
He said that with the continuously increasing gold rates, the current GST rate is increasingly becoming a burden for the industry and end customers.
Appeal for GST Reduction on Gold
Therefore, Rokde said GJC is urging a reduction in GST from the current 3 percent to 1 percent in the upcoming Budget, which will encourage compliance.
Benefits of GST Reduction
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, he added.
MP Ahammed, Chairman, Malabar Group, added, “To boost demand for precious jewellery, the budget needs to propose tax relief measures to boost disposable income and consumption. Some strategic measures to control inflation impact on consumption are also welcome.”
Need for Concessional GST Rate on Lab-Grown Diamonds
The industry apex body 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.
Currently, both natural and lab-grown diamonds are taxed at the same GST rate.
‘Dedicated Ministry for Jewellery Sector’
GJC 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.
Revamp of EMI and Gold Monetisation Scheme
“We request the government to consider the EMI on jewellery, which has been a long-standing demand of the industry. Gold monetisation Scheme also needs a revamp as it has the potential to unearth idle household gold in the economy and thus helping us to be self-reliant and promote less imports,” GJC Vice-Chairman Avinash Gupta said.
Ahammed too hoped that the government may propose measures to revise the existing gold monetisation scheme to facilitate participation of recognised and reputed retail jewellers.
Union Budget 2025 Date
Finance Minister Nirmala Sitharaman will present the Union Budget 2025 on Saturday, February 1, 2025, at 11:00 AM IST.
(With agency inputs)
