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Budget sops spoilsport for jewellery industry

02 Mar '07
2 min read

MUMBAI:
Industry players are of the opinion that Union budget 2007-08 could have done much more for gems and jewellery industry to achieve its export target of $20 billion.

Though reduction in import duty on cut and polished diamonds (CPD) from 5 to 3 per cent, rough synthetic diamonds from 12.5 to 5 percent and un-worked coral from 30 to 10 percent is viewed as a positive step, the industry had expected nil duty on CPD.

This would definitely have helped India to emerge from the largest manufacturing centre to the largest trading centre faster, said Mehul Choksi, Chairman, Gitanjali Jewels.

The duty on machinery import at 5 percent would allow the industry to obtain the latest technology for enhanced quality production at competitive rates.

"If we want to make India a global diamond trading centre, it should have been zero. But if there are fears of any misuse, even a one percent duty would have sufficed," Bakul Mehta, former Chairman and Convenor, Diamond Panel, Gem and Jewellery Export Promotion Concil (GJEPC) said, as he felt reduction of import duty on CPD was not enough.

The budget has proposed a favourable assessment procedure for companies which declare profits at 8 percent or more of the turnover.

"Introduction of turnover tax regime in diamonds is a historical step towards enhancing diamond industry growth," according to a statement by Sanjay Kothari, GJEPC. "This principle acceptance of the tax system by the Finance Ministry is affirmative and encouraging. However, the industry expected the turnover tax to be applicable for the entire gem and jewellery sector."

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