Budget 2025 Expectations: Gems, Jewellery Sector Seeks 1% GST Cut

The gems and jewellery sector has called on the government to reduce the goods and services tax to 1% based on the revenue equivalence ratio, aiming to ease the industry's cost burden in the upcoming Budget.

"We seek rationalisation of taxes and availability of finance to support business," the All India Gem and Jewellery Domestic Council Chairman Rajesh Rokde said in a statement on Tuesday.

With the continuously increasing gold rates, the current rate of GST is increasingly becoming a burden for the industry and end customers, he said.

Therefore, the GJC is urging for a reduction in the GST from the current 3% to 1% in the upcoming Budget, which will encourage compliance, Rokde said.

The tax reduction will enhance affordability for consumers, especially in rural areas, and most importantly, improve revenue collection by increasing the size of the formal economy, he added.

The industry’s apex body emphasized the need for a concessional GST rate on lab-grown diamonds to better reflect their sustainable and cost-effective nature compared to natural diamonds. At present, both natural and lab-grown diamonds are subject to the same GST rate.

Additionally, the GJC requested the government to establish a dedicated ministry for the jewellery sector, along with state-specific nodal offices and the appointment of a central minister to oversee the industry.

"We request the government to consider the EMI on jewellery, which has been a long-standing demand of the industry. Gold monetisation Scheme also needs a revamp as it has the potential to unearth idle household gold in the economy and thus helping us to be self-reliant and promote less imports," GJC Vice Chairperson Avinash Gupta said.

(With Inputs From PTI)