The All India Gem and Jewellery Domestic Council (GJC) has sought a reduction in import duty on gold and called for increasing the cash purchase limit of gold to ₹1 lakh, from ₹10,000.
In its Budget wishlist submitted to the Finance Minister, it urged for extending the EMI facility to purchase jewellery and make NEFT/ RTGS facility available on weekends when gold jewellery purchases are done.
Trade deficit
Anantha Padmanaban, Chairman, GJC, said the 10 per cent import duty on gold was levied to curb Current Account Deficit. However, India’s trade deficit has narrowed to 2.5 per cent of GDP in 2019.
To unlock family gold reserves of up to 24,000 tonnes and help reduce CAD, the Council said exemptions must be given to households for minimum 500 grams of gold deposited under the Gold Monetary Scheme without being questioned by the Tax Department.
Shaankar Sen, Vice-Chairman, GJC, said government should instruct banks to waive off the commission or reduce it to 0.20 per cent to boost digital transactions.
“We also request the government that in case the jewellery sold is reinvested in new jewellery, the exemption from Capital Gain as per Section 54F of the Income Tax Act 1961 should be the extended to G&J Industry,” he said.
In the case of making of new jewellery from old jewellery or old gold, the GST is applicable on labour charges is at 18 per cent. Due to high rate of GST, customers are reluctant to go for this option.
PAN card limit
The Council recommended increasing the PAN card limit from ₹2 lakh to ₹5 lakh. Many households do not have PAN cards, especially in the agriculture sector. Hence, they face difficulty in furnishing the same, said the Council.
Have received representations for cut in customs duty on gold: Sitharaman
Certain representations have been received from traders for reduction in customs duty on gold, Parliament was informed Monday.
“Yes sir. Certain representations have been received for reduction in basic customs duty on gold. In past, Ministry of Commerce had recommended reduction in import duty on gold. Such representations are examined as a part of budget exercise,” Finance Minister Nirmala Sitharaman said in a written reply to the Lok Sabha.
She replied this on a question whether the government has received any representation from gold traders requesting for reduction in import duty on gold.
Currently, import of the yellow metal attracts 10 per cent duty.
The country’s gold imports dipped about 3 per cent in value terms to $32.8 billion during 2018-19, which is expected to keep a lid on the current account deficit.
Total imports of the precious metal in 2017-18 had stood at $33.7 billion as against $27.5 billion in 2016-17 and $31.8 billion in 2015-16.
According to the data provided by the minister, in volume terms, India imported 982 tonnes of the yellow metal in the previous financial year.
The imports in 2017-18, 2016-17 and 2015-16 was 955 tonne, 778 tonne and 968 tonne, respectively.
India is one of the largest gold importers in the world, and the imports mainly take care of demand from the jewellery sector.
Gems and jewellery exports declined 5.32 per cent to $30.96 billion in 2018-19.
The country’s current account deficit (CAD), or the difference between outflow and inflow of foreign exchange in the current account, increased to $57.2 billion or 2.1 per cent of gross domestic product in 2018-19 as against 1.8 per cent in the previous year.
The domestic jewellery sector always demands a cut in the duty and relaxation of other import norms for increasing availability of the yellow metal to boost jewellery exports.
