Kolkata, September 28: With reports of several sectors affected amid an ongoing economic crisis in India, the handmade jewellery sector is the latest addition. Reports are arriving that over 50,000 Bengali karigars or artisans of handmade jewellery sector have returned to their hometowns in West Bengal after the overall gross exports of gems and jewellery declined 14.44 percent to USD 28.84 billion in August.
The recent situation has reportedly arrived following an increase in the gold prices, hike on import duty on gold to 12.5 percent and new Goods and Services Tax (GST) of 18 percent on handmade jewellery. Due to these reasons, this year Diwali's order -- compared to last year -- have reduced by almost 70 percent. Also, the work in the diamond city Surat has come down by 40 percent. GST Rates Revised: Hotel Stays Become Cheaper, Caffeinated Drinks Get Costlier; Here's The Complete List of New Tax Rates Announced by Nirmala Sitharaman After GST Council Meet in Goa.
According to data, published by Gem and Jewellery Export Promotions Council’s (GJEPC), the total gross exports for the current financial year (2019-20) have declined 8.92 percent to USD 15.33 billion. Not only the handmade jewellery, but exports of cut and polished diamonds also fell 24.86 percent to USD 1.64 billion.
Adding more worry to the ongoing crisis are two major factors. First being the declining value of Indian rupee in the global market and second, being the United States-China trade war. Market experts opine that higher US tariff on Chinese jewellery is crucial for India, and with the ongoing trade war, countries like Thailand and Vietnam are benefitting.
Considering the demand by the jewellery industry to decrease the GST rate on polished goods, Union Finance Minister Nirmala Sitharaman on September 20 slashed the GST on cut and polished semi-precious stones from 3 percent to 0.25 percent. Also, she waived off GST on silver and platinum from 3 percent to nil. However, the GST on handmade jewellery still remains at 18 percent, while the import duty on gold is 12.5 percent.
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Though the Union government decreased the GST on diamond polishing and machine-made jewellery from 5 percent to 1.5 percent, handmade jewellery still attracts 18 percent GST. Even the custom duty on imported gold was raised from 10 percent to 12.5 percent in the Union Budget 2019. Apart from this, the GST on jewellery was fixed at 3 percent as compared to 1 percent in the erstwhile VAT regime.
(The above story first appeared on LatestLY on Sep 28, 2019 12:03 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).