The Gem & Jewellery Export Promotion Council (GJEPC) has welcomed the government notification exempting exporters from levy of 3% IGST on gold supplied to them by Nominated Agencies, and said that it would actively pursue other tax reliefs it has sought for the export industry, including similar exemption from IGST for silver and platinum supplies too.
The change had been decided by the GST Council last month and has been effective from January 1, 2019, following a government notification.
It may be recalled that due to the efforts of the GJEPC, Nominated Agencies were exempted from payment of GST upfront vide a government notification in October. However, jewellery exporters did not benefit as they were still required to pay the 3% IGST upfront along with the 10% import duty. The latest notification now extends the exemption to them as well.
Commending the government on its decision, GJEPC Chairman Pramod Kumar Agrawal stated that the move was based on the recommendations made by GJEPC. He said, “The upfront payment of IGST and Import duty in the form of bank guarantee had led to the huge working capital blockage for various small and medium jewellery exporters, increased interest cost, hassles of compliance to claim refund thus consequently impacting their business operations & global competitiveness.”
The GJEPC has now said that it will also pursue the implementation of other GST-related changes recommended by it already. This includes similar exemptions to exporters of silver and platinum articles.
Other key recommendations pertaining to changes in the GST regime that the Council is pursuing are:
- Single GST tax rate regime of 0.25% across the entire value chain for diamonds/coloured gemstones/semi-precious gemstones to ensure no blockage of the input tax credit (‘ITC’) due to inverted duty rate structure. {Currently, while GST rate on cut and polished diamonds and gemstones has is 0.25%, GST rate of 5% (job work charges)/18% (others) applies on input services, leading to accumulation of ITC qua domestic supplies.}
- Issue clarification regarding exemption for consignment import and export of gems and jewellery through exhibition/export promotion tours.
- Issue instructions on refund of accumulated ITC pertaining to the stock of the stated products held as on the date of the rate change.
- Issues pertaining to import of gold on a consignment basis for manufacture and export of jewellery.
NewsSource: gjepc.org
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