Gems and jewellery sector upset with the Budget
Union Finance Minister’s offer to raise the customs duty on gold and
silver has not gone down well with the gems and jewelry sector that is
apparently troubled for not getting any interest relief.
'The prices of precious metals continue to rise. Since the customs duty is levied on these at specific rates, I propose to index the rates as follows: on gold and platinum from Rs.200 per 10 grams to Rs.300 per 10 grams. On silver from Rs.1,000 per kg to Rs.1,500 per kg,' Mukherjee said in his budget speech Friday.
Pankaj Parekh, eastern regional chairperson of the Gems and Jewellery Exports Promotion Council, informed that increase in customs duties was not very exciting news for the Gems and jewelry sector.
Previously, the customs duty was Rs. 200 for gold, when the price of the yellow metal was Rs.12000 per 10 grams. Now the duty is hiked to Rs.300 when the price of the gold reached Rs. 17,000 per 10 gms. That apart India's gems and jewellery sector is also unhappy over its omission from select export sectors, which can benefit from the 2% interest subvention scheme for one more year till March 31, 2011.
'Gems and jewellery is a traditional item in our export basket. Rhodium - a precious metal used for polishing jewellery - attracts a basic customs duty of 10 percent. This is being reduced to 2 percent,' Mukherjee said.
The SMEs falling in the Gems and Jewelry sector were looking forward to some relief in Budget 2010 considering the negative impact of the global economic downturn. However their expectations went for the toss with the government hiking the customs duty of the yellow metal.
According to a proprietor of a leading jewelry store in Ahmedabad, with exports escalating and steady growth reported since a last few months, the industry was looking forward to some key measures that would help the sector sustain its upward trend. However this never ensued. The FM should have introduced some initiatives to help SMEs in the gems and jewelry sector to recover from the recessionary pressures.
'The prices of precious metals continue to rise. Since the customs duty is levied on these at specific rates, I propose to index the rates as follows: on gold and platinum from Rs.200 per 10 grams to Rs.300 per 10 grams. On silver from Rs.1,000 per kg to Rs.1,500 per kg,' Mukherjee said in his budget speech Friday.
Pankaj Parekh, eastern regional chairperson of the Gems and Jewellery Exports Promotion Council, informed that increase in customs duties was not very exciting news for the Gems and jewelry sector.
Previously, the customs duty was Rs. 200 for gold, when the price of the yellow metal was Rs.12000 per 10 grams. Now the duty is hiked to Rs.300 when the price of the gold reached Rs. 17,000 per 10 gms. That apart India's gems and jewellery sector is also unhappy over its omission from select export sectors, which can benefit from the 2% interest subvention scheme for one more year till March 31, 2011.
'Gems and jewellery is a traditional item in our export basket. Rhodium - a precious metal used for polishing jewellery - attracts a basic customs duty of 10 percent. This is being reduced to 2 percent,' Mukherjee said.
The SMEs falling in the Gems and Jewelry sector were looking forward to some relief in Budget 2010 considering the negative impact of the global economic downturn. However their expectations went for the toss with the government hiking the customs duty of the yellow metal.
According to a proprietor of a leading jewelry store in Ahmedabad, with exports escalating and steady growth reported since a last few months, the industry was looking forward to some key measures that would help the sector sustain its upward trend. However this never ensued. The FM should have introduced some initiatives to help SMEs in the gems and jewelry sector to recover from the recessionary pressures.
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