The Union Budget 2019 was a disappointing blow to the gems and Jewellery industry as Finance Minister Nirmala Sitharaman announced a hike on gold import duty to 12.5% to the existing 10%. This comes as a shock to the industry as it could escalate the problems the gems and jewellery industry is already facing.

“This is extremely disappointing and unfortunate. With the implementation of GST, everything was going smooth and the market was on its way to transparency. Now a 2 per cent increase in customs duty, is going to make gold cheaper in the grey market and this in turn is going to increase smuggling. The PM had done a fantastic job in catching all the culprits, now with this move everybody is going to smuggle their money back into the system through gold with a 10 per cent premium. This is a terrible move,” said Anantha Padmanabhan, GJC, Chairman

Colin Shah, Vice Chairman, GJEPC commented, “Very disappointing. Increase in duty is going to lead to more smuggling. It will harm gold jewellery exports and there will be an impact on employment as well. Basically, it is not a very positive signal from the Government towards are industry.”

Speaking on the budget Pramod Agrawal, Chairman, GJEPC said, “Industry is already in tough times and it could get worse. This could lead to lot of employment loss. The hike in duty of raw material is also a big hurdle and will create capital blockage for exporters. This might cause increase in smuggling activities for gold with the increase of import duty. We will again present our view to Government and request for some motivation for industry.”

“I think it will encourage smuggling and also genuine and lawful business men will be effected. Let’s look for finer print of the budget,” said Sanjay Kala, President, Jewellers Association, Jaipur. 

The FM also reduced corporate tax on companies with a turnover of up to Rs 400 crore to 25% . To discourage cash payments, the finance minister has proposed a TDS of 2% on cash withdrawals exceeding ₹1 crore in a year from a bank account. Those earning more than Rs 2 crore annually will be liable to pay higher surcharge. The FM also scrapped monthly GST return and estate or gift taxes from the existing tax structure. 100 new clusters will be set up in 2019-20 to enable 50,000 artisans to come into the economic value chain. The government aims to launch mission to integrate traditional artisans and creative persons with global market and to obtain GI/patents for them.