Mumbai, Jan 16: The All India Gem & Jewellery Domestic Council (GJC), the apex body representing India’s domestic gems and jewellery trade, has suggested Goods and Services Tax (GST) reforms and tax relief for the industry in its pre-budget recommendations to Finance Minister Nirmala Sitharaman.
Key budget recommendations
As part of its recommendations for the Union Budget 2026–27, the association said that GST reforms are needed to restore affordability and eliminate working capital blockage.
The GJC suggested a reduction of GST on gold and silver jewellery from 3 per cent to 1.25 per cent—or a uniform 1.5 per cent across the sector—on revenue to offset the inflation-driven tax burden and revive middle-class and rural demand.
Other demands include direct tax relief on unrealised inventory appreciation due to the gold price surge; strengthening formalisation and consumer protection through policy clarity; operationalisation of the long-pending Tourist GST Refund Scheme; and sector-specific measures to mobilise idle gold, deepen digital payments, and support Micro, Small, and Medium Enterprises (MSME).
Relief for MSME jewellers
The association also recommended simplified compliance for MSME jewellers, including higher turnover thresholds for returns and protection from duplicate notices post-audit.
The association suggested a one-year deferral of income tax on unrealised inventory appreciation caused by the gold price rise in FY 2025–26, without interest. It also sought an exemption from capital gains tax on the exchange of hallmarked jewellery when proceeds are reinvested in new jewellery.
Industry voices
Rajesh Rokde, Chairman of GJC, said that the sharp rise in gold prices has multiplied the absolute GST burden on consumers and created severe working capital stress for jewellers.
“Our recommendations are not for concessions but for restoring proportionality, liquidity and fairness. A modest GST reduction, together with relief on notional inventory gains and job-work clarity, will bring millions of transactions back into the formal economy, protect karigar livelihoods, and make jewellery once again an accessible savings asset for Indian households,” said Rokde.
Avinash Gupta, Vice Chairman of GJC, added that the gems and jewellery sector is committed to formalisation, transparency and digital transformation.
“By operationalising the Tourist GST Refund Scheme, enabling EMI for 22-karat jewellery, capping credit-card MDR, and regulating digital gold, we can significantly enhance traceability, boost tourism-linked exports, and bring younger consumers confidently into the organised market,” said Gupta.
He added that the reforms will also help reduce India’s reliance on imported bullion over time by mobilising domestic gold through transparent banking channels.
Additional reform proposals
Other key reforms suggested by the industry include the refund of accumulated Input Tax Credit on input services or the reduction of GST on key input services such as rent, security and logistics from 18 per cent to 5 per cent to correct the inverted duty structure.
Another recommendation is a policy framework for digital gold, a rationalised Merchant Discount Rate on credit card transactions, and the introduction of formal EMI for hallmarked 22-karat jewellery.
The association said that a circular affirming 5 per cent GST on jewellery job-work services will protect karigars (craftsmen) and prevent field-level harassment. The GJC also called for the operationalisation of the Tourist GST Refund Scheme at major airports to boost inbound tourism retail spending.
Also Watch:
The reforms, GJC said, will strengthen India’s position as a global jewellery hub while aligning with national goals of Atmanirbhar Bharat, Make in India, and Viksit Bharat @2047.
To get details on exclusive and budget-friendly property deals in Mumbai & surrounding regions, do visit: https://budgetproperties.in/
