The jewellery industry has welcomed the decision of the Finance Ministry and the government to reduce import duty on gold and silver from 12.5% (plus 3% cess) to 10.75 % (including cess). The jeweller community stated that the decision will surely provide immense relief to them and the end consumers. Gems & Jewellery Council (GJC), which had been representing this concern for many years, is now happy that the government has decided to reduce import duty.
"Our Custom Duty Policy should have the twin objective of promoting domestic manufacturing and helping India get onto the global value chain and export better. The thrust now has to be on easy access to raw materials and exports of value added products. Gold and silver presently attract a basic customs duty of 12.5%.
Since the duty was raised from 10% in July 2019, prices of precious metals have risen sharply. To bring it closer to the previous levels, we are rationalising custom duty on gold and silver," Finance Minister Nirmala Sitharaman had said while sharing the budget on Monday.
"This is a welcome decision made by the government and it will surely provide immense relief to the Jewellers and the end consumers. Appointment of SEBI as the regulatory authority for gold exchange is also a welcome step. We would once again like to request the government to simplify the GMS as suggested by GJC so that large quantities of idle gold lying in households can be better utilised for the nation, instead of relying on imports," said Ashish Pethe, chairman of GJC.
The jeweller community is delighted with the decision made by the government to reduce import duty on gold. “There is excitement amongst jewellers as everyone wants to do healthy business. It seems like finally the government took note of the concerns of the jewellery industry and took the right decision. I spoke to several jewellers known to me within Zaveri Bazaar and they all were very happy with the decision. Import duty in India was very high as compared to the import duty imposed on gold by other countries and this had impacted our business a lot," Nilesh Shubhavat of Raj Mudra Jewellers in Zaveri Bazaar told the Free Press Journal on Monday.
Shubhavat added, "Earlier, when the customs duty was less, several NRIs used to purchase gold jewellery from here. But since the past few years, purchases made by the NRIs have gone down duty to high duty. Now, we expect NRIs to come back after the government has decided to reduce duty."
Sanjay Agarwal, who is into the silver business and runs RV Agarwal Impex Private Limited at Zaveri Bazaar said, "Malpractice involved in the gold and silver business as well as smuggling will also come down after the reduction in duty."