Duty cut on colour gems to boost jewellery exports

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Gem and Jewellery Export Promotion Council (GJEPC) has hailed the Budget proposals announced for the gem & jewellery industry in order to encourage value addition and exports.

The Finance Minister on Friday proposed to exempt from duty rough cubic zirconia and to reduce duty on polished cubic zirconia from 10% to 5%. Similarly, the duty on rough coral will be reduced to 5% from 10%.

"Reduction of import duty on rough Cz from 5 to zero per cent and on cut and polished Cz from 10% to 5% will definitely boost the growth of the industry. The duty on rough coral is reduced to 5% from 10%, which is a positive step as well," Sanjay Kothari, Chairman GJEPC said.

Coloured gemstones are used as raw material in manufacturing studded jewellery. In order to maintain competitiveness in jewellery sector, India needs stones, which are not available in India. The country currently imports rough colour gemstones from Bangkok. With the reduced duty and waiver of the duty, imports of such products can be increased, which will result into more trading activity, sources said.

The industry had greater expectations from the Budget such as reduction in turnover tax from the taxable income of net profit of 8%, which has been brought to 6% by notification on February 22, 2008.

He said, "We believe this is not beneficial as the industry's demand was 3% for the same. The duty on import of polished coloured stones was expected to be removed and it was not done."