The newly elected Chairman of the Gem & Jewellery Export Promotion Council of India (GJEPC), Praveenshankar Pandya and Vice Chairman, Russell Mehta addressed a Press Conference on 20th Oct. and shared the strategy and policy recommendations of the new team to restore the health of the Indian gems and jewelry industry. After summing up the well-known challenges facing the diamond industry, they enumerated a litany of additional challenges facing the Indian diamond industry on the eve of launching the Special Notified Zone (SNZ) in Mumbai, which was planned to launch on July 1, but is now hoping for a November debut.
Extensive, pending recommendations
"The GJEPC’s contention is that the diamond sector has been losing edge to other [diamond trade] centres, particularly in trading due to the high cost of finance and unstable taxation policies", writes Rough&Polished. In order to improve the situation for the gems and jewelry industry, the new team has come up with some pre-budget recommendations for the year 2016-17, among which are: inclusion of the gem and jewelry sector under the interest subvention scheme (to lower loan rates for exporters) and the Merchandise Export from India Scheme (MEIS) "to offset infrastructural inefficiencies and associated costs involved in export of goods/products, which are produced /manufactured in India; the introduction of presumptive taxation system (lowering import tax, previously denied) for the Indian diamond industry; the abolition of minimum alternate tax (MAT) and dividend distribution tax (DDT) for the gems and jewelry sector; abolition of the 2.5% import duty on cut and polished colored gemstones; and ensuring ready availability of precious metals gold/silver/platinum for small and medium exporters.
GJEPC also stressed the importance of a legislative amendment to the Special Notified Zone tax modifications through the Finance Bill 2016, along with other additional policy changes in this regard. For a country that has designs on becoming a legitimate and major trade center in the near future, it certainly seems like measures such as making income from rough diamond displays non-taxable is just the tip of the iceberg.