KOLKATA: Gem & Jewellery Export Promotion Council (GJEPC) has sought exemption for gem and jewellery export transactions and 1.25% GST rates for domestic transactions even as the GST Council commenced a crucial meeting to set rates.
At present, gems & 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% on the sale price by almost all the states in India.
In its representation, GJEPC mentioned that export transactions should not be subjected to any effective GST as regards exports. 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 levy of any import duty/GST. In the representation, GJEPC has mentioned that all transactions, whether direct or indirect, for exports, should continue not to be taxed with any indirect taxes in the form of GST.
As regards transactions for domestic consumption (other than those meant for ultimately converging into exports), GJEPC, in its representation, has suggested that the preferred tax rates for different segments of the GJI should be nil for rough and cut and polished diamonds and coloured gemstones.. The body has suggested a GST of 1.25% for gold/silver/platinum jewellery (including studded jewellery and costume fashion jewellery). It has said that gold procured from nominated agencies for purpose of use in exports should continue to be exempted in line with the existing framework).
Mr. Praveenshankar Pandya, chairman, GJEPC said, “Considering that India has achieved a pre-eminent global position in the gems & jewellery exports and that 4.6 million of skilled & unskilled people are directly employed in the business, and GJI contributes 14% of the India’s merchandise exports, it is urged that as currently, all transactions, directly or indirectly, in the course of exports of the products of GJI, should not suffer any tax burden under GST. Considering the extremely high price sensitivity of the products of GJI and the various complexities in the manufacturing and distribution cycle, tax and fiscal policy makers in India have, over several decades, experienced and accepted that, for domestic transactions, a minimal indirect tax rate of 0 – 1.25% best ensures tax compliance and collection, while curbing the well known adverse economic impacts of higher taxation in the GJI. Given the high price of the products where around 80% - 95% of the content is imported component, diverse sensitivities that the gem and jewellery industry (GJI) faces as well as considering its economic and social significance, historically, the GJI has always been taxed at the very lowest level in the current system of indirect taxation.”
Sources :economictimes.indiatimes.com
No comments:
Post a Comment