The Indian gem and jewellery industry have approached the government to modify tax deduction at source (TDS) in the proposed Direct Tax Code (DTC), as reported in a leading media. The current TDS applied in India’s DTC requires jewellers to pay 10 percent tax at source, irrespective of the business margin they operate in. The Indian gem and jewellery industry is opposed to this inclusion, as the margins are very small.

Another aspect of the Indian Direct tax Code that has raised concern in the eyes of the industry is the ‘search and seizure’ provisions and tax on gross assets. The industry fears these provisions would hamper growth in the future.