Gold Industrys Budget Wish: BCD Withdrawal, Rational Tax Structure

The gems and jewellery industry in India has appealed to the government to reconsider the recent hike in Basic Customs Duty (BCD) on gold imports and introduce a more rationalised tax structure in the upcoming interim budget. The industry, which contributes nearly 7% to India's GDP, believes that a supportive business environment is crucial for its growth and prosperity.

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Withdrawal of BCD Hike on Gold

Saiyam Mehra, Chairman of the All India Gem And Jewellery Domestic Council (GJC), emphasised the need to withdraw the increased BCD on gold. He pointed out that the current BCD of 12.5% ad valorem, coupled with other taxes, results in a total tax burden of 18.45% on imported gold. This, he argues, hampers the industry's competitiveness and puts additional pressure on consumers.

Increase in PAN Card Transaction Limit

In light of rising gold prices, the GJC has also urged the government to increase the PAN card transaction limit for gold purchases from the current Rs. 2 lakh to Rs. 5 lakh. Mehra explained that this step is essential to cater to the needs of consumers, especially in rural areas, who often purchase gold as an investment. Additionally, he called for an increase in the daily purchase limit under the Income Tax Act from Rs. 10,000 to Rs. 1,00,000 to facilitate gold sales in times of emergency.

Restoration of EMI Facility

The GJC has further recommended the restoration of the EMI facility for the gems and jewellery industry. This, they believe, will provide consumers with greater flexibility and convenience when making purchases, thereby boosting demand and supporting the industry's growth.

Strengthening the IIBX Exchange

Saurabh Gadgil, Director of the India Bullion and Jewellers Association (IBJA) and Chairman and Managing Director of PNG Jewellers, highlighted the importance of fortifying the India International Bullion Exchange (IIBX) exchange. He called for measures to enhance liquidity and establish India as a price maker rather than a price taker in the global gold market. Gadgil also expressed hope that reducing import duties on gold would discourage unscrupulous grey market players and promote a more organised and transparent industry.

As the gems and jewellery industry eagerly awaits the upcoming budget, it remains hopeful that the government will take into consideration its concerns and implement policies that foster growth, competitiveness, and consumer-friendly practices. A rationalised tax structure, increased transaction limits, restoration of the EMI facility, and strengthening of the IIBX exchange are among the key measures sought by the industry to unlock its full potential and contribute to the overall economic prosperity of India.