- Even as the Goods & Services Tax (GST) Council is mulling a decision on the taxation rates, the Gem & Jewellery Export Promotion Council (GJEPC), in a representation filed with the government, has sought exemption for gem and jewellery export transactions and minimal GST rates for domestic transactions.
- At present, gems and jewellery exports are effectively zero-rated. Hence any element of tax in exports is required to be rebated.
- As regards VAT, it is typically charged at the rate of 1 per cent on the sale price by almost all states in India and the council said not more than 1.25 per cent GST should be levied on sale of gold and diamond jewellery in the domestic market.
- “Export transactions should not be subjected to any effective GST. All related consumption of raw materials, inputs and input services such as input of rough diamonds gold/silver/platinum (through duty free export promotion schemes) at the input level should continue to be free from the levy of any import duty/GST,” GJEPC said.
- As regards transactions for domestic consumption, GJEPC has suggested that the preferred tax rates for different segments should be from 0 to 1.25 per cent.
- “Considering that India has achieved a pre-eminent global position in gems and jewellery exports and that 4.6 million of people are directly employed in the business, all transactions in the course of exports of the products of Gem & Jewellery industry, should not suffer any tax burden under GST.”
Source: The Hindu