Gems and jewellery federation recommends reduction of import duty on gold.

NEW DELHI: The Gems and Jewellery Federation (GJF) has recommended to the government a reduction of the 6% import duty imposed on gold late last month in a bid to curb the current account deficit (CAD). While an increase in duty would make the yellow metal costlier, it would not lead to a parallel decline in its consumption, the federation for promotion of trade in gems and jewellery said.

Besides a reduction of the import duty, the federation also recommended an abolishment of transactions in ETF, gold mutual funds and similar instruments which increase investment in idle gold.

""We do not want a rollback today, but please don't make this hike to 6% permanent. We wish the government clarifies that there are interim and temporary measures until the CAD issue is overcome,"" said Vinod Hayagriv, immediate past president, GJF.

The organization suggested that tax collection at source be applicable to purchase of coins and bullion in cash and not on jewellery purchases. The government had in January this year increased the import duty on the precious metal from 4% to 6% to curb the unproductive import of gold. India is among the largest importer of gold in the world.

The import duty on gold had been doubled to 4% early last year. Other recommendations that the federation made included abolishing wealth tax on gems and jewellery to encourage people to bring it in their books, imposing excise duty on Commodity Transaction Tax and increase margins in gold and silver trading in commodity exchanges, allowing jewelers to receive gold deposits from consumers.

""We understand the government's concerns but raising import duties will encourage smuggling and income generated from these activities may be used for illegal activities that can threaten national security Bachhraj Bamalwa, Chairman - All India Gems and Jewellery Federation said.


Source : timesofindia.indiatimes.com