Industry Expectations - Budget 2008Mehul Choksi, Chairman, Gitanjali Group
The Gem and Jewellery industry is the second highest contributor to the foreign exchequer and has been given a favorable consideration over the years. However, over the last few years some retrogressive tax regimes have come into place and this has not been very encouraging. As the Diamond & jewellery Industry contributes a huge amount to the Forex reserves, issues concerning the industry must be dealt with very carefully which will in turn affect the growth of the Industry and the economy at large. Below are some issues that the industry is very concerned about.
To bolster jewellery trade in India and bring it in par with the other countries of the world, duties should be reduced on coloured gemstones and zircons, similar to case of the diamonds.
The Duty on finished Jewellery for 18k and lower should be reduced because in an industry where volumes are high and margins are low, this duty deters growth.
The Excise Duty on Branded Jewellery should be abolished, since, the era we belong to; we are posed with a crying need for encouragement of the branded jewellery segment which would render better evaluation to the industry on a global level.
India being in the nascent stage of realizing the importance of Branding, its initiative should be supported by creating a Brand Equity Fund.
To combat the ill-effects of the falling dollar value, India needs to build in stronger infrastructure allowing for greater growth for the diamond merchants. A consistent policy in the support of SEZ is expected.
To accelerate the growth of the industry further and support upward growth and expansion plans of the merchants, there needs to be an ample availability of dollar finances and interests in rupee finances should be lowered.
To improve the fiscal health of the Industry and remove major clogs, the proposed taxation regime should be incorporated. This will help the economy in becoming a strong, resilient and well-oiled machine. These steps will also facilitate the Industry's dream of making India an "International Jewellery Trading Hub". By adopting this pattern of taxation, very soon India will be one of the most attractive countries in terms of tax regime and can lead to incremental funds flows into the country.
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