The sector comprises 85-90 per cent of MSMEs and the revision in classification criteria of MSMEs will help them achieve higher efficiencies of scale, technological upgradation and better access to capital
Mumbai: Gems and jewellery industry on Saturday welcomed the government’s move to reduce the basic customs duty on platinum findings and slashing of jewellery duty in the Union Budget 2025-26.
Gem and Jewellery Export Promotion Council (GJEPC) chairman Vipul Shah said the council welcomes the proposal of creating new tariff items in Chapter 71 so as to distinguish precious metals containing 99.9 per cent or more by weight of silver, containing 99.5 per cent or more by weight of gold, containing 99 per cent or more by weight of platinum under headings 7106, 7108 and 7110, respectively.
This move aligns with the representation made by GJEPC for addressing the issue of classification of alloys of platinum (predominantly containing gold), which was invariably leading to claim of unwarranted customs duty exemptions for the import of platinum under India-UAE CEPA (Comprehensive Economic Partnership Agreement), he said.
“The sector comprises 85-90 per cent of MSMEs and the revision in classification criteria of MSMEs especially with those with turnover from Rs 250 crore to Rs 500 crore will help them achieve higher efficiencies of scale, technological upgradation and better access to capital.
“The extension of credit guarantee cover to MSMEs leading to additional credit of Rs 1.5 lakh crore in the next 5 years will benefit and provide a boost to the MSMEs in the sector,” Shah added.
He further stated that the government’s stable approach on duties and levies across gem and jewellery products will enhance ease of doing business.
“The Basic Customs duty rate has been reduced from 25 per cent to 5 per cent on platinum findings classified under 7113 will enable consumers to get a new product and increase affordable jewellery sales,” he stated.
World Gold Council Regional CEO, India, Sachin Jain said, the budget announced by Finance Minister Nirmala Sitharaman is advantageous for the gold industry as it increases disposable income, encourages spending, and promotes economic growth across various income levels.
“The omission of TCS above certain limits reduces compliance burdens and enhances the ease of doing business. Creation of Export Promotion Mission, National Manufacturing Mission furthering “Make in India”, the National Centres of Excellence for Skilling encouraging MSME’s and digital public infrastructure ‘BharatTradeNet’ for international trade will support the Indian gold industry and enhance its crucial role in contributing to Viskit Bharat 2047,” he said.
Overall, this consumption-led budget prioritises both investments and spending, with the increase in disposable incomes due to an enhanced tax exemption limit expected to boost overall consumer demand, including that for gold and jewellery, Jain added.
Kama Jewelry MD Colin Shah said, the reduction of jewellery duty from 25 per cent to 20 per cent is a welcome move.
“For a country like India who is known for its high jewellery consumption, this will definitely boost the demand in the domestic market especially in luxury. Similarly, slashing of duty on platinum finding to 5 per cent is yet another bold move which will prove beneficial for the entire gems and jewellery industry.
The Budget also provided some rejoicing to the diamond sector by removing IGCR conditions for import of duty free LGD (Lab Grown Diamond) seeds which will further increase the appeal of LGDs and boost its demand, he added.
