GJEPC to seek tax exemptions for jewellery purchases by women.

NEW DELHI: The Gems and Jewellery Export Promotion Council (GJEPC) today said it will make a case for seeking tax exemptions for working women on jewellery purchases to encourage demand in the domestic market.

"We will recommend to the government that working women should be given some tax incentives so that they can buy more jewellery since it is traditionally popular amongst them and is also considered as a good investment option," GJEPC Chairman Rajiv Jain said at an Assocham function here.

The council comes under the Commerce Ministry. The proposal has been floated at a time when gold prices have risen to over Rs 29,000 per 10 grams compared to about Rs 22,000 during the same period a year ago.

In January this year, the government tweaked customs and excise duty structure on precious metals.

Besides, in the Union Budget 2012-12, Finance Minister Pranab Mukherjee proposed an excise duty of one per cent on non-branded jewellery of precious metals (other than silver) and doubled import duty on gold to 4 per cent.

To protest against the hike in duties, the jewellers went on a three-week nationwide strike and later called it off following government's assurance to consider their demand on its rollback.

As far as India's gems and jewellery exports are concerned, GJEPC said, the duties would also impact the shipments, particularly that of cut and polished diamonds.

"In cut and polished diamonds exports, we expect a decline this fiscal due to two per cent import duty on diamonds imposed in January," Jain said.

These diamonds, which form a major chunk of India's total gems and jewellery exports, declined by 22 per cent in the last quarter of 2011-12.

The country imports large quantities of rough diamonds and after cutting and polishing they are re-exported.

However, Jain said, gold jewellery, silver and coloured gems stones exports may witness up to 12 per cent growth this fiscal compared to the last year.

"But due to expected decline in outbound shipments of diamonds, the overall gems and jewellery exports growth may remain flat in 2012-13," he said.

During 2011-12, India's gems and jewellery exports dipped marginally to USD 42.84 billion owing to weak demand in its major markets like the US and Europe.

Source : economictimes.indiatimes.com