Studded jewellery to become costlier

KOLKATA: Consumers will have to shell out more for jewellery studded with rubies, emeralds and sapphires, as the Budget has proposed to impose a 0.5% basic customs duty on these uncut stones which at present can be imported tax-free.

A 0.5% customs duty has also been introduced on rough coloured gemstones, rough semi-precious stones, rough synthetic gemstones polished and rough cubic zirconia. Introduction of the duty on gemstones will also affect exporters, as much of the imported gemstones are shipped to international markets after value addition.

The basic customs duty on gold coins has been increased to 12.5% from 10%, keeping it at par with the duty on imported bullion. With this, domestically manufactured gold coins will now have a level playing field.

“This is disappointing for the exporters and gemstone-cutting and polishing trade. Increase in import duty will make these stones costlier,” Gem & Jewellery Export Promotion Council (GJEPC) chairman Pramod Agarwal said. The US, Hong Kong and Europe are the major markets for gemstones, he added.

In the domestic market, consumers are preferring studded jewellery over pure gold jewellery as gold prices have shot up by more than 20% in the past one year. “Now the studded jewellery consumption will come down as prices will go up,” said Surendra Mehta, the national secretary of the India Bullion & Jewellers Association.

“The only positive thing is that basic customs duty on platinum and palladium has been reduced from 12.5% to 7.5%,” GJEPC vice-chairman Colin Shah said. “The increase in customs duty on gemstones will result in job loss and we will lose competitiveness to our neighbouring countries.”

Basic customs duty on spent catalyst, or ash-containing precious metals, imported for recovery of precious metals has been reduced from 12.5% to 11.85%.

The trade sees the decision to set up an International Bullion Exchange at the GIFT City in Gujarat as a positive step.

Tapan Ray, the managing director of GIFT City, said: “This will lead to better price discovery of gold, create more jobs and further enhance India’s position in the bullion market.”

GIFT International Financial Services Centre has an approved free trade zone for housing vaults. Already 19 insurance entities and 40 banking entities operate from there.


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