The gems & jewellery industry is set to spread more shine all around due to a possible import duty cut on cut and polished diamonds (CPDs) and gemstones along with introducing of presumptive tax regime, which allows for computation of income-tax on the basis of turnover, in this year's union budget.
The M R Sivaraman committee, set up last year recommended to cut Customs tariff on import of CPDs and gemstones from 5 percent to nil.
The sector accounted for nearly 15 percent of country's total exports and 19 percent of total world demand for gems and jewellery in 2006.
The Finance Ministry wants to put centres like Mumbai as a diamond hub of the country on lines of cities like Antwerp and Bangkok.
The proposal of presumptive tax regime for gems and jewellery sector will reduce administrative costs and encourage output which in turn would reduce taxes.
The abolition of duties on CPDs and gemstones, is expected to increase exports of studded and finished ornaments.
Indian jewelers will benefit the most by duty cuts as they cater to bulk buyers from the US and European Union for Indian diamond studded jewellery.
This move will bring India at par with competitors like Thailand which have zero tariffs on import of gold diamonds and gemstones.
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