To harmonize tax treatment, job-work activity for all products of gem & jewellery industry should be put in the 5% tax slab, the Council proposed
The gem & jewellery sector, one of the largest employment generators, is seeking changes in the Goods and Services Tax (GST) so that all transactions of gem & jewellery sector between import and export are in a no-tax situation.
Industry body The Gem & Jewellery Export Promotion Council (GJEPC) said that between stages of import and export, there is levy of GST on each supply in relation to diamonds. “The upfront payment of tax, estimated at Rs4,000 crore in each export cycle, will lead to funding issues, and correlated cost of funding. These are not the kind of costs that any other competing global players bear. The industry has proposed to the government to enable a scheme under GST where all transactions between import and export are in a no-tax situation,” The Gem & Jewellery Export Promotion Council (GJEPC) said in a representation to finance minister Arun Jaitley.
The Council proposed that a scheme which emulates key competitors such as Belgium and Israel by exempting (with input tax facility), nil-rating or taxing at nil or nominal value all transactions between registered members of the GST Group, may be introduced. GJEPC pointed out that under GST, exporters are required to bear upfront IGST / GST on procurement of gold, platinum and silver. It demanded that such procurements be exempted from GST upon bond being furnished by nominated agencies to Customs authorities.
The Council pointed out that job-work transaction for precious gems & jewellery are taxed at 5% under GST, whereas same activity for other products, including imitation jewellery, are taxed at 18%.
WHAT COUNCIL SAID
To harmonize tax treatment, job-work activity for all products of gem & jewellery industry should be put in the 5% tax slab, the Council proposed.
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