GJEPC seeks exemption for gem and jewellery export transactions

By

Maverick Martins

Published
Oct 20, 2016

The Gem and Jewellery Export Promotion Council (GJEPC) has sought an exemption for gem and jewellery export transactions and 1.25% GST rates for domestic transactions, even as the GST Council commenced a crucial meeting to set rates, according to an Economic Times report.

 
At present, gem and jewellery exports are effectively zero-rated. Hence, any element of tax in exports is required to be rebated. In regards to VAT, it is typically charged at the rate of 1% on the sale price by almost all the states in India.
 
In its representation, GJEPC mentioned that export transactions should not be subjected to any effective GST as regards exports.

All related consumption of raw materials, inputs and input services such as input of rough diamonds gold/ silver/platinum (through duty free export promotion schemes) at the input level should continue to be free from levy of any import duty/GST.
 
In the representation, GJEPC has mentioned that all transactions, whether direct or indirect, for exports, should continue not to be taxed with any indirect taxes in the form of GST.
 
As for transactions for domestic consumption (other than those meant for ultimately converging into exports), GJEPC, in its representation, has suggested that the preferred tax rates for different segments of the GJI should be nil for rough and cut and polished diamonds, and coloured gemstones.
 
The body has also suggested a GST of 1.25% for gold/silver/platinum jewellery (including studded jewellery and costume fashion jewellery).

It has said that gold procured from nominated agencies for purpose of use in exports should continue to be exempt, in line with the existing framework.