Union Budget 2023-24: Gems and jewellery industry unhappy over 10 pc import duty on gold
New Delhi/IBNS: The gems and jewellery industry expressed disappointment over the Union Budget 2023-24 presented by Finance Minister Nirmala Sitharaman on Wednesday (Feb 1), saying that it failed to address the industry’s core concerns.
The industry has said the 10 percent import duty on gold will continue to encourage the grey market to the detriment of the organised sector.
Finance minister Nirmala Sitharaman proposed to increase the import duty on silver dore, bars and articles to 10 per cent to align them with that on gold and platinum.
Currently, the basic customs duty on silver dore is 6.1 per cent, while on semi-manufactured items it is 7.5 per cent.
The finance minister also proposed a cut in import duty on seeds used to make lab-grown diamonds with a view to boosting domestic manufacturing.
Mahabir Danwar Jewellers Director Vijay Soni said, “The Gems & Jewellery Industry's critical concerns are not addressed in the Union Budget 2023-24. While the Research and Development grant will be provided for the development of Lab Grown Diamonds, seeds and machines, the other sectors of the industry have been ignored.“
He added, “The reduction in Gold Custom Duty in this Budget was our big expectation, which has severely hampered the industry and encouraged smuggling and grey market. However, the exemption of Capital gains on the conversion of physical gold to digital form is a very good step."
Aditya Modak, Co-founder, Gargi by P N Gadgil & Sons, said, “The gold import duty has remained the same; we expected it to go down by 2.5%. On the other hand, the import duty on silver has increased by 2.5%, affecting the fashion jewellery market due to the price hike of Sterling Silver.”
On the other hand, the reduction in surcharge on super-rich taxpayers will give positive sentiment to investments.
Also, the increase in the Income Tax limit will increase the disposable surplus income of the middle class, which will be good for tourism, discretionary spending, and luxury FMCGs, he added.
Kalyan Jewellers Executive Director Ramesh Kalyanaraman, "We are confident that increased disposable income due to changes in the tax slab will improve spending power, thus benefiting the overall consumer sector including the organised jewellery retail industry.”
Initiatives such as PM Vishwa Karma Kaushal Samman programme are a pioneering step towards empowering traditional artisans and craftspeople - the backbone of our industry, he opined.
This newly-conceptualised assistance package will be a welcome relief to the community and will enable them to equip and upgrade themselves with changing times.
“The government’s innovation-led and technology-driven approach reflect in its investment towards research on lab-grown diamonds, which will generate new employment opportunities while resonating with the export as well as urban Indian market,” stated Kalyanaraman.
The increase in the import duty of silver will not have a significant impact on us (Kalyan jewellers), as our primary focus is on the gold, diamond and other precious stone studded jewellery, he added.
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