GJEPC's wish list from Union Budget 2011

The Gem and Jewellery Export Promotion Council, the apex trade body for India’s gem and jewellery trade, hopes the Union Budget 2011 awaited on February 28, 2011, will offer friendlier policies for the sector. The Council has identified areas where changes can leverage its efforts in strengthening the domestic gem and jewellery industry and Brand India in the international industry.

Some expectations are Presumptive Taxation –to replace the current "Benign Assessment Procedure’ meant for assessees of diamond manufacturing /or trading activities declaring net profit rate @ 6 percent, and to reduce the net profit rate to 3 percent, which can help reduce businesses migration to low cost labour intensive countries like China and Thailand, trade hubs and to avoid subsequent loss of employment.

Exemption of the current 10.2 percent Service Tax levied for broker services rendered outside India to procure roughs, as margins in the global markets are thin and this will enable India maintain its competitive edge G&J exports.

Consignment Exports: Addressing the issues of import of rough diamonds and coloured gemstones for assortment and re-export of the same; import of rough diamonds for purchase or return; establishment of a Diamond Sale Operation in India, the Council seeks import rough diamonds and colour gem stones on consignment basis, import of rough diamonds for purchase, return and establishment of diamond sale operation in India, ultimately generating additional foreign exchange by exporting the labour component of the final product.

The BDB as an organisation should be given tax exemption similar to the Tax Holiday that is allowed to SEZs under the relevant 2005 Act. All material imported by companies / or all material procured from domestic sector for use within BDB should be exempt from duties; all services utilised for companies operating within BDB should be exempt from duties; companies inside BDB should be assessed under the Presumptive Tax system. The Council believes taxation of BDB and non-exemption of goods and services used in the Bourse will increase operating costs for companies in the Bourse and make them non-competitive; Presumptive Tax will bring BDB on par with the Belgian and Israeli bourses -- otherwise operations from within BDB will be non-competitive.

Income Tax Exemption to all Export Promotion Councils – (As per the Finance Act. 2008 has amended the definition of Charitable purpose, in which the surplus generated in a particular year maybe interpreted by the Income Tax Department as taxable & Circular No. 11 of the year 2008 on the above subject has left the interpretation to field level.), so that the surplus in one year may be utilized for the export promotion activities in next year.

Elimination of import duty on Rhodium from the current 2 percent to 0 percent, thereby infusing diversity to Indian jewellery and competitiveness in the global industry.

Import Duty Exemption on Machineries In which the Council proposes the current import duty of 10 percent be reduced to 5 percent to allow accessibility to better machines and match international quality and design standards.