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GST impact on Gems & Jewellery Industries (GJI)

GST impact on Gems & Jewellery Industries (GJI). “A 5% rate was agreed upon by most states, highest levy on gold, which is hard to digest,” finally we are waiting 3 rd June Final GST rate!. Dated 23.05.2017. Requested to keep GST rate 1.25%, otherwise impacts a lot.

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GST impact on Gems & Jewellery Industries (GJI)

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  1. GST impact on Gems & Jewellery Industries (GJI) “A 5% rate was agreed upon by most states, highest levy on gold, which is hard to digest,” finally we are waiting 3rd June Final GST rate! Dated 23.05.2017 CA. ASHWANI RASTOGI, DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

  2. Requested to keep GST rate 1.25%, otherwise impacts a lot • The business was modest, partly because of the cap on cash transactions at Rs 2 lakh. Coming so soon after the near collapse of the business during the demonetization months, the environment is now beginning to seriously worry jewellers.  • Federation already requested the Centre to fix the tax rate at 1.25% for ornaments made of gold, diamond or other precious materials. Jewellers were also seeking to lower customs duty from the current 10% to 4%. • Previously Mr. Jaitley assured jewellers the GST Council would consider their demand sympathetically.  “He said there would be no surprises for us. That means the tax rate will be in the region of the current level. A 0.25 percentage point hike would be fair,“TOI dated 2.5.2017 CA. ASHWANI RASTOGI, NEW DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

  3. Key facts…1 • The GJI currently offers employment to 46 lakhs + of our citizens, skilled workers (Karigars) who are not formally educated and are not readily employable in other sectors. It is expected that the workforce may rise to more than 82 lakh by 2020, adding more than 35 lakh new jobs,“ • GJI offers a unique employment opportunity. The sector must be given due importance as it has huge potential to create new jobs. • The GJI thus plays a unique role as an employer in the Indian economy. CA. ASHWANI RASTOGI, NEW DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

  4. Key facts…2 • The products of the GJI have for long been the preferred instrument of savings, specifically for the lower income group. Jewellery in the form of ‘Streedhan’ and ‘Meher’. • From the past several years, India has become the largest purchaser of in the world-wide context and much more than ninety per cent of it is for conversion to jewellery. Gold has an essential purchase role while in the household sector and also acts as equity inside non-corporate field. The gold granted to a bride on her wedding was totally hers by right. It acted being an insurance policies towards tricky periods and only she could choose the best way to utilize it.  • It is therefore imperative that the GST regime continues to fully support exports of the GJI. CA. ASHWANI RASTOGI, NEW DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

  5. Key facts…3 • "Overall exports from gems and jewellery sector in India during the first six months of 2015-16 stood at $19.22 billion (Rs 125948.66 crore), which shows a decline of 5.59% over the $20.3 billion (Rs 133025.9 crore) exported in the same period last year. Expected to reach $40 billion (Rs 2.62 lakhcrore) by 2020 as per the World Gold Council. • The GJI is highly export-oriented and a major contributor to the foreign exchange earnings (USD 38.59 billion in FY 2015-16). • Indian Gems and Jewellery industry is one of the largest in the world with a share of 29% in global jewellery consumption. • This sector's market size is about 6-7% of the country's GDP, and it is the second highest contributor to the Indian commodity exports with a share of 13% after petroleum products (20%). CA. ASHWANI RASTOGI, NEW DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

  6. CA. ASHWANI RASTOGI, NEW DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

  7. CA. ASHWANI RASTOGI, NEW DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

  8. CA. ASHWANI RASTOGI, NEW DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

  9. Flow of Input Credit CA. ASHWANI RASTOGI, NEW DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

  10. Migration to GST or New Registration • Site re-operate w.e.f. 1.6.17 • As 30.04.2017 date already lapes but don’t worry.. GST Enrollment at GST Portal (www.gst.gov.in) is Temporarily Closed after Last Date Deadline of 30 Apr. 2017 (as extended); Enrollment window will re-open for remaining Taxpayers; Keep watching this space for further announcement. https://www.gst.gov.in/ • More than 60 lakh taxpayers enrolled on GST Portal between 8th November 2016 and 30th April 2017. The Enrolment process has closed with effect from 1st May 2017. Data of all those who have signed the enrolment form will be migrated to the new GST System. CA. ASHWANI RASTOGI, NEW DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

  11. GST Implementation ……Let’s Get Ready CA. ASHWANI RASTOGI, NEW DELHI E: ashwani.rastogi@globaltaxation.in M: (+91) 9990999281

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