Budget wishlist: Cut gold import duty from 10% to 2%.

With the UPA government curbing gold imports, the gems and jewellery sector has seen exports lose sheen. But now with a new government in charge of the gems and jewellery, export promotion council is hopeful of a pick-up. CNBC-TV18's Farah Bookwala Vhora says after drawing a blank with the UPA-government, GJEPC made its pitch to new FM Arun Jaitley and the initial response is satisfying.

The GJEPC presented its pre-Budget wishlist to FM and revenue secretary Shaktikanta Das, amidst 25 other business groups and trade bodies on June 6, details of which are being made public now. Their charter of demands include:

- Reduction in import duty on gold from 10 percent to 2 percent

- Introduction of a 2 percent presumptive tax to bring India at par with Israel, Thailand and China

- Re-introduction of an interest subvention of 3 percent on rupee export credit for small and medium scale units

- Treating gold futures contracts as business and not speculative transactions.

The council though has strongly reiterated one particular demand to boost exports.

Vipul shah, chairman, GJEPC says, "We need to have special notified zones where mining companies can come down to India and offer goods in the form of auction or tenders so that we have raw material at our doorsteps which will save us transaction costs. The procedure is very simple, whatever goods they sell they pay a nominal presumptive tax and the balance they take home."

The GJEPC also made new recommendations on allied issues such as:

- Amending the domestic transfer pricing clause in the Finance Act 2012. This clause was introduced to ensure that taxable units don't shift profits to either tax-free or loss making units to reduce tax liability. But GJEPC argues the clause is being applied as a blanket rule on all inter-party transactions and is increasing the compliance costs and paperwork, even when there is no scope for tax evasion as both units fall under the same tax bracket.

The GJEPC also wants the government to reintroduce tax holidays for the export industry and withdraw minimum alternate tax.

GJEPC says while Jaitley has taken cognizance of these recommendations, they are unlikely to find their way into this year's Budget, but is expecting changes through notifications and guidelines later in the year.

Source : moneycontrol.com