The gems and jewellery industry has urged withdrawal of hike in Basic Customs Duty (BCD) on import of gold in the coming interim Budget and asked the government to introduce a rationalised tax structure.
"The jewellery industry contributes nearly 7 per cent of India's GDP and hence, deserves a pro-business environment," apex body for the gems and jewellery industry All India Gem And Jewellery Domestic Council Chairman Saiyam Mehra told PTI.
"This will also benefit the government. We urge the finance ministry to withdraw the increase in BCD on gold in the upcoming Union Budget and a rationalised tax structure may be developed to tackle the CAD issue," Mehra said.
Currently, the BCD is at 12.5 per cent ad valorem, which takes the total tax to 18.45 per cent on the imported gold, he added.
He further urged the government to increase the PAN card transaction limit to Rs 5 lakh from the present Rs 2 lakh as gold prices have surged.
"With the rising gold rate, there is an urgent need to increase the PAN card transaction limit to Rs 5 lakh from the present Rs 2 lakh. A majority of consumers in rural India buy gold as an investment.
"Consumers also sell gold in case of an emergency. With the cash purchase limit of Rs 10,000 per day under the Income Tax Act, consumers cannot sell gold jewellery to meet their needs. Hence, the daily purchase limit also needs to be increased to Rs 1,00,000 per day," he added.
Additionally, GJC has also recommended the facility of EMI to be restored to the gems and jewellery industry.
India Bullion and Jewellers' Association (IBJA) Director and PNG Jewellers Chairman and Managing Director Saurabh Gadgil said, "The gems and jewellery industry awaits measures to fortify the IIBX exchange, enhanced liquidity for it, so that India becomes a price maker and not a price taker."
"Reduction in import duties on gold will ensure that unscrupulous grey market players lose their edge and start getting more organised," he added.