Government’s announcements on GST rate cuts , reduction in Corporate Tax and relief for MSMEs to boost gem & jewellery industry: GJEPC

GJEPC’s recommendations accepted by Hon. Union Finance Minister and GST
Council

Mr. Pramod Kumar Agrawal, Chairman, GJEPC,
said, “The Gem and Jewellery Export Promotion Council (GJEPC) welcomes the Hon. Union Finance Minister Smt. Nirmala Sitharaman’sannouncements on 20th September 2019 wrt to GST rate reduction (announced after the 37th meeting) and corporate tax rate cuts. These measures will enhance Ease of Doing business, boostexports and make India more competitive with respect to neighbouring countriesand attractive as an investment destination. More importantly, the stimulus willbring cheer to the trade constituents and industry on the eve of the festival season.It is the right signal to send to the world especially on the eve of Hon. PrimeMinister’s visit to the US, which is the biggest export market for the gem & jewellery industry.

The Government has accepted the recommendations proposed by GJEPC andsimilar to gold, now silver and platinum will also get GST exemption whensupplied by nominated agency for export purpose. The rate of GST on cut and polished semi-precious stones has been reduced from 3% to 0.25%. This move will reduce the burden of working capital blockage and enable exporters to compete in international markets. The Government has granted exemption from GST/IGST at the time of import on Silver/Platinum by specified nominated agencies; andsupply of Silver/Platinum by specified nominated agency to exporters for exports of Jewellery. Diamond India Limited (DIL) has been included in the list of nominated agencies eligible for IGST exemption on imports of Gold/ Silver/Platinum so as to supply at Nil GST to Jewellery exporters. In terms of Jobwork service, Government has reduced rate of GST from 5% to 1.5% on supply of job work services in relation to diamonds. The measures will provide impetus to the sector, help upscale manufacturing and augment exports of Gems & Jewellery from India .

The Government has given a positive stimulus to the economy and the industry facing challenging times due to slump in global demand and also due to low domestic consumption. The deduction in corporate tax is brought down to 25 percent . The tax rate of just 15% announced for new manufacturing units will encourage Make in India and also international companies seeking to set up manufacturing base in India in the aftermath of the US-China trade war.

Most MSMEs including those in the gem & jewellery sector are now eligible for priority sector credit benefits and this is a very positive development for the industry. Export credit limit has been enhanced to Rs. 40 crore from the earlier level of Rs. 25 crore. ”