GJEPC calls on government to withdraw excise tax on jewellery

India’s Gem & Jewellery Export Promotion Council (GJEPC) recently called on the government to withdraw the 1 percent excise duty on jewellery – excluding plain silver jewellery – in the 2016-2017 Union Budget.

In a press release, the council said GJEPC Chairman Praveenshankar Pandya has already approached the government to initiate meetings with officials from the finance and commerce ministries in an effort to convince them to roll back the imposition of the excise tax.

Pandya said an excise duty had not been imposed on the jewellery sector in the last three to four decades due to the “unique” nature of the industry, adding that its manufacturing and sales operations were quite small in scale.

The industry also imports all of its gold requirements, which are covered by a customs tax, he continued.

“Though we morally support the stand taken by GJF and other industry associations, we do not want to go on strike as a protest against this announcement since we believe in engaging with the government through constructive dialogue,” Pandya said.

In India, jewellery is largely produced by the small- and medium-sized enterprises (SMEs), which are not equipped to follow the rigid compliance of excise norms, GJEPC said. The imposition of an excise duty would severely impact jewellery production in the country, which could result in job losses among the country’s uneducated but skilled jewellery workers, it added.

“We are distressed to learn that in the case of the gemstone and jewellery sector, no specific attention has been paid to address our request to improve the ease of doing business in a sector where India has a major share in the world market. We expected the government to announce measures to facilitate the export-oriented industries and create a [more business-friendly environment]. We find that our existing concerns have not been addressed in this budget,” Pandya said.