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Budget 2023 Expectation: The commerce ministry has sought a reduction in the import duty on gold in the forthcoming budget with a view to push exports and manufacturing of the gems and jewellery sector, sources said.
In July this year, the centre hiked gold import duty to 15 per cent from 10.75 per cent to check the current account deficit (CAD) and rising import of the yellow metal. The basic customs duty on gold is 12.5 per cent. Along with the agriculture infrastructure development cess (AIDC) of 2.5 per cent, the effective gold customs duty will be 15 per cent.
“As the gems and jewellery industry has recommended the commerce ministry for a cut in the duty, the commerce ministry has urged the finance ministry for the same. The ministry has also asked for tweaking import duty on certain other products to boost manufacturing and exports,” the sources said. Every year, the gems and jewellery export industry seeks a reduction in import duty.
Former chairman Gems and Jewellery Export Promotion Council (GJEPC) Colin Shah said that the industry is pinning its hope on the forthcoming Budget to push exports and generate jobs in the sector. “Customs duty cut on gold and a progressive repair policy for jewellery will help the sector immensely. We are also very hopeful that there will be presumptive taxation on our special notified zones for rough diamonds and abolition of duty on the seed used for lab-grown production,” Shah, who is also the founder and MD of Kama Jewelry, said.
According to the council, India has the potential to be the repair hub of the world and this policy can help increase exports by up to USD 300-400 million. The gems and jewellery exports rose by 2 per cent to USD 26.45 billion in April-November 2022 this year. Gold imports have dipped by 18.13 per cent to USD 27.21 billion during April-November this fiscal.
Gold imports have a bearing on the current account deficit (CAD). India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonne of gold annually.
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