GST is a big issue in the Gold and Jewelry industry. The implementation of the 1% GST on G&J will place the whole industry under one umbrella and make the sector better organized. Already the All India Gems and Jewellery Trade Federation (GJF) have urged the government to bring the whole segment under the ambit of a uniform tax regime under the GST. The industry feels that such action will also give a fillip to the ‘Make in India’ at the grass root level.
Placing the industry under a collective head will also help in the proposed gold monetization scheme which can be successfully implemented once the sector comes under the organized sector.
According to Mr. Sreedhar GV, GJF Chairman, the federation is keen to support the government policy initiatives and is already in close touch with Gems and Jewellery Export Promotion Council (GJEPC) to encourage jewelry exports by creating fashionable jewelry manufacturing hubs across the country.
The chairperson said that the industry endorses the efforts by the government to boost the sector with measures like Make in India program; gold monetization scheme, obligatory Hall-Marking and starting of gold loans to the trade, which has created a positive atmosphere for doing business.
However, there are dissenting voices also who want the government to pay more attention to job generating industries such as the ornament and gems industry while deciding on the rate of the GST. The GST Council will deliberate on whether there should be an area based GST or not. The committee will also deliberate on product-based GST or not also.
The G&J industry contributes to more than 15% of the nation’s exports and also gives employment to thousands of blue collar workers. Therefore the government should keep the interests of the sector in mind while formulating a GST rate for this particular industry.
Today the industry is taxed at 2%, and it includes VAT and excise duty. There are many people who feel that since this is a labor-intensive segment, and adds value, therefore, must be kept out of the ambit of GST. Any tax structure beyond 2% will have an adverse effect on the industry.