Gems &Jewellery sector wants gold duty to be 4 per cent

Ahead of the union budget, the gems and jewellery industry has reiterated its demand of lowering import duty on gold to 4 per cent.

Government had increased the import duty from two per cent in January 2011 to 10 per cent by end of 2013 in different stages in order to curb the widening of current account deficit. The RBI had assured that the duties will be brought down once the CAD was under control. CAD has narrowed to 2.5 per cent of GDP in 2019.

According to All India Gems and Jewellery Domestic Council, bringing down the duty will curb the grey market which has been flourishing after the duties went up. The industry has been demanding the reduction of duties for the past few years.

Meanwhile, Gems and Export Promotion Council GJEPC has sought reduction in import duty on cut and polished diamonds to 2.5 per cent from 7.5 per cent.

The domestic jewellery industry also wants the PAN card limit on jewellery purchases to be raised from Rs 2 lakh to Rs 5 lakh. Wedding purchases always exceed the limit and households, especially those in rural areas, with no PAN card have been finding it difficult to make purchases for marriages.

GJC has further asked to lower the commission on credit card transactions.

"Banks charge commission of one or 1.5 per cent whenever the credit card is swiped. This charge makes the jewellery costlier to the customer and encourages cash transactions. We suggest the government to waive off the bank commission or reduce it to 0.20 per cent," it said. The council also asked to exempt purchase of new jewellery by selling old jewellery from capital gains tax.