GJEPC has offered following key recommendations for the gem & jewellery trade at a recent pre-budget meeting with Union Finance Minister Nirmala Sitharaman:
Sale of rough diamonds in Special Notified Zones (SNZs):
GJEPC has urged the Government to consider its long pending demand of sale of rough diamonds in Special Notified Zones (SNZs) through Safe Harbour Rule and to expand the ambit of entities entitled to operate through SNZs. Currently only viewing session are held by mining countries at SNZs.
SNZ for rough gemstones in Jaipur:
GJPEC has proposed the establishment of an SNZ for rough gemstones in Jaipur. With these SNZs in Mumbai, Surat, and Jaipur, the critical issue of raw material availability would be greatly relieved.
Facilitate Rough Diamond Broking and Trading Companies at SNZ:
With a view to further extend and expand the scope of SNZs, GJEPC requested the Government to also allow globally recognised diamond broking/ trading houses such as Bonas and I Hennig to also similarly operate from such SNZs. Such trading houses are the focal point for sale of diamonds of smaller miners which cumulatively comprise close to 35% of the global mining produce.
Introduction of Diamond Imprest Licence:
Under beneficiation scheme, some mining countries do not allow export of raw/rough diamonds without some value addition (cutting). These diamonds when imported in India are not considered rough diamonds but treated as cut & polished diamonds and attract BCD of 5%. This makes export of polished diamonds from India less competitive as compared to competing countries like China, Vietnam and Sri Lanka. Due to beneficiation, the business is shifting to mining countries like South Africa, Namibia, Tanzania etc.
Reduction in import duty on precious metals to 4%:
The Council has also sought reduction in import duty on precious metals Gold Bar (7108) from 15% to 4%. This will ensure that duty blockage of around Rs. 982.16 crore can be released resulting in more working capital in hand for industry. Untapped export potential for gold jewellery can be realised with more working capital (at least US$2 billion of US$ 11 billion in medium period of 2 years). GJEPC has sought reduction in import duty on Silver Bars (7106) from 10% to 4%; and reduction in import duty on Platinum Bars (7110) from 12.5% to 4%.
Introducing duty drawback on exports of Platinum Jewellery:
In the absence of tariff rate of platinum combined with high import duties and non-availability of duty-free platinum from nominated agencies/banks, this imposes constraints on DTA exporters and therefore the majority of exports of platinum jewellery is happening through SEZs. Since duty drawback is not available on platinum, therefore DTA units are not able to export as they are not competitive in international market.