The gems and jewelery sector in the country is still feeling the after-effects of demonetisation, said the All India Gems and Jewellery Trade Federation (GJF).
The gems and jewellery sector in the country is still feeling the after-effects of demonetisation, said the All India Gems and Jewellery Trade Federation (GJF). The body pointed out that the sector was initially hit by the move to the extent of 75% since several buyers had refused to purchase gold. According to Nitin Khandelwal, president of GJF, the sector is still feeling the pinch and sales have been affected to at least 25%. “This is because of the increasing move towards digitalisation and lesser cash transactions. Customers do not carry cash. Moreover, there are higher charges on credit and debit cards, which are discouraging people from making gold purchases,” he said. He was speaking to scribes on the sidelines of GJF’s 4th edition of Preferred Manufacturer of India – B2B networking meet in Pune on Monday. On the performance of the sector in 2017, Khandelwal said that, like other sectors, the gems and jewellery business also experienced a slowdown in demand. The year 2017 was one of transitions – demonetisation and GST. While welcoming the special slab of 3% on GST, he said the sector is seeking 1.25% GST on gems and jewellery since this would help encourage billings and bring in transparency. The government will also end up with more revenue, he said.
The federation is also seeking a revision in the rates imposed on credit card and debit card transactions so that more customers would move towards cashless payments and digital transactions. The government should look into the cost of transactions in the case of credit cards. Merchants have to bear the high cost of transactions. Margins in the jewellery business are thin with the highest being 10%, he said.
While welcoming the move to hallmark gold, he said that the government should also look at 23/24 carat gold. Earlier Union minister Ram Vilas Paswan had said that the revision of the standards on gold will also ensure that only categories of 14, 18 and 22 carat will be sold in the country.