• Notification Date: 19-01-2022
• Notification No: N/A

Jewellers urge FM to Increase PAN Card Limitation up to 5 Lakh and Reduce GST

All India Gem and Jewellery Domestic Council (GJC) has appealed to the FM to reduce the GST rate on ornaments to 1.25% from 3% in Budget 2022. GJC, the apex body of the gems and jewelry industry, has also made the appeal of increasing the PAN card limit from 2 lakh to 5 lakh. According to GJC, the people dwelling in the rural areas are not capable of arranging their required jewelry in times of emergency after the pandemic. Most of them do not hold PAN cards.

After the Covid-19 pandemic, the gems and jewelry industry has been suffering massive losses. It is on its way to recovery after the two successive waves in 2020 and 2021. Besides, the new variant of the virus, Omicron, has already imposed several restrictions. The jewelry business has been facing curbs for the last two years. The MSME jewelers, craftsmen, and artisans who comprise a major part of the industry are in grave stress and financial crunch and they are not being able to relax. The customers are not likely to spend much on jewelry.

GJC has appealed for clarification on the minimum quantity of gold that can be deposited independently by a customer to withdraw money against it for financial requirements under the Gold Monetization Scheme (GMS).  GJC has also requested to approve the EMI facility for buying 22K gold ornaments. This will help the gems and jewelry industry to prosper and make up for the losses.

GJC has urged the government to approve the reinvestment of old jewelry in the purchase of new ones. The department requested the extension of the exemption from Capital Gain under Section 54F to the gems and jewelry industry. This will further lead to a planned and compliant business for the industry in the future.

GJC requested a cumulative GST rate of 1.25%. The tax will be charged on the gems and jewelry made of various metals and articles under the Revenue Equivalence Principle. Jewellery was charged with excise duty if the turnover exceeded 10crore rupees. Hence, a small part of the industry was subjected to this duty. The rate was 1% (without input credit) or 12.5% (with input credit). 1% of Value Added Tax (VAT) was charged on the pieces of jewelry too. The tax on the indigenous gems and jewelry was 1%-2% for most of the players.

The Gold Monetization Scheme (GMS), introduced in 2015, enables the deposit of gold ornaments, bars, coins to earn assets. People can deposit the money earned against a gold loan into a Gold Savings Account. GJC has appealed to allow the households to deposit at least 500 grams of gold without facing any queries from the tax department. This will be highly beneficial for the participants as well as the government.