The gems and jewellery industry, which is going through a challenging time due to COVID-19 pandemic, has urged the government for a supportive e-commerce policy and a ‘priority sector status’ so that it can bring in operational benefits.
The Gem and Jewellery Export Promotion Council (GJEPC) in a video meeting with Finance Minister Nirmala Sitharaman on Monday made a presentation on the critical issues concerning the gem and jewellery industry, according to a statement.
Some of the concerns presented by GJEPC include, e-commerce policy for the gem and jewellery sector, making MyKYCBank platform mandatory for all gem and jewellery entities, sale of rough diamonds by miners in Special Notified Zones (SNZs), reduction in import duty on polished diamonds and ‘Gold Monetisation’ scheme among others.
GJEPC also requested for a clarification on ‘Online Equalisation’ Levy for B2B international diamond auctions.
“COVID-19 has led to a paradigm shift in consumer behaviour across geographies. With e-commerce gaining momentum, a massive rise is seen in online purchases, and introduction of a supportive e-commerce policy for the sector will drive online jewellery purchases,” GJEPC Chairman Colin Shah said.
Shah further said that “there is a need for a dedicated system-driven ‘Fast Track Customs Clearance’ of shipments for the gems and jewellery goods valued below USD 800”.
Shah said, GJEPC has also urged to reduce polished diamond import duty to 2.5 per cent from 7.5 per cent to help India to strengthen its status as a polished diamond hub, as all distribution would then be out of India, leading to increase in duty collection due to greater volumes.
The Council also proposed direct sale of rough diamonds by miners in SNZs. Currently, rough diamonds are sent to SNZs by miners for viewing and are shipped back to Dubai or Antwerp (Belgium).
“Sales aren’t permitted, and if they do, it comes under the Permanent Entities as per the IT Act, and attracts income tax on the sale. The same goods are then shipped back to India via offices in Dubai or Antwerp, thus increasing costs for the importer,” he said adding as much as 60 per cent of the rough diamond is routed through Antwerp or Dubai.
Shah further said “we need to take measures and bring in reforms that would strengthen the ease of doing business in the industry, and at the same time make the industry self-reliant. The Finance Minister has assured us that she will look into the issues and address the concerns through periodical reviews”.
On the availability of bank finance, GJEPC Vice Chairman Vipul Shah said, the industry has access to about Rs 66,580 crore of bank credit, which amounts to 0.68 per cent of the total bank credit of Rs 98,91,788 crore, which is minuscule in comparison to the socio-economic contributions made by this sector.
“We have also raised our concerns over the limited financial support extended by the private banks,” he said.
GJEPC also gave suggestions to strengthen the Gold Monetisation scheme and for the development of SEZs into economic employment enclaves.
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