All India Gem & Jewellery Domestic Council, apex body of jewellers, appeals to the government to rationalise GST on bullion and precious ornaments at 1.25%, which comes down from present 3% GST so as to reduce consumer burden and raise sales.
GJC thanks Hon’ble Finance Minister Smt Nirmala Sitharaman ji for raising the matter in the GST council to rationalize and simplify GST rates.
Now, when GST was introduced in July 2017, the price of 24-carat gold was around ₹28,439 per 10 grams. This pricing level, the GST Council set the incidence rate of GST on bullion and precious ornaments at 3% although the incidence of the earlier indirect tax structure was, as such, an effective 1% with Excise Duty having been implemented in the year 2016 that applied only to those jewellers with turnover of 10 crores and above and gave relief to almost 80 to 85 % of the industry, as they didn’t fall in the excise duty ambit. So, GJC thinks that the rate of GST needs to be 1.25% considering this reason.
February 6, 2025: The bullion price of 24-karat gold increased by as much as 204 per cent in 7.5 years to Rs 86,510 per 10 grams, yet the Goods and Services Tax has remained at 3%. That is perpetual accumulation of the same tax on consumers as well as jewellers. GST must be re-tuned downward to 1.25%. Taxation could then be leveled to industry economics to encourage more compliance and neutralise revenue at least.
This implies that one of the core principles of GST determination was revenue neutrality, ensuring the taxation levels will remain equivalent to pre-GST rates. Under the erstwhile indirect tax structure, the gems and jewellery industry’s revenue-neutral rate should actually be 1.25%, not 3%.
This puts India at the top of jewellery-making and manufacturing all around the world. To give a boost to the ‘Make in India’ scheme, an appropriate competitive tax structure needs to be developed wherein local production becomes the demand side rather than going through unofficial channels or imports. Reducing GST to 1.25% will get the local manufacturers working, which consequently increases the employed population and helps brand India the global destination for jewellery making-in line with ‘Make in India’ vision forwarded by Honourable Prime Minister Mr Narendra Modi.
Mr Rajesh Rokde, Chairperson, All India Gem & Jewellery Domestic Council said: “Gems & Jewellery Industry GJI is vital for the economic growth of this country. And it contributes through employment generation in the industry to exports and eventually to the development of the whole economy. High taxes have been oppressing businesses, and finally, it becomes a cause that encourages unregulation of this trade.”. We appeal to the Hon’ble GST Council to reconsider and rationalize the GST rate at 1.25% so that the industry grows sustainably and the tax base remains robust. Mr. Avinash Gupta, Vice Chairman of the All India Gem & Jewellery Domestic Council, added, “Before GST, Central Excise Duty was only levied at 1%, while most of the states levied a 1% Value Added Tax (VAT), all based on Revenue Equivalence Ratio, and with the rise in Gold rates, the GST should come out at 1.25% for the Gems & Jewellery Industry.”.
It appeals to the government to reduce GST to 1.25% without damaging revenue neutrality; it will most definitely make the GST fair and sustainable. About GJC: All India Gem and Jewellery Domestic Council was instituted with an objective of the national trade to address the functioning of the industry and its cause with a 360-degree approach to promote and progress growth by protecting the interest of the industry. As an industry body of self-regulating nature, GJC had functioned over the last 19 years as an interface between Government and the trade and had pursued several activities for and on behalf of the trade.
