India’s decision to slash the goods and services tax (GST) on gem and jewellery-related products and services is a welcome reprieve for industry players, said the Gem and Jewellery Export Promotion Council (GJEPC).
The government last week cut tax rates in a bid to reignite growth in the local economy.
India’s GST council lowered rates on “job work” services in relation to diamonds from 5 percent to 1.5 percent while taxes on cut and polished semi-precious stones were reduced from 3 percent to 0.25 percent.
GJEPC Chairman Pramod Kumar Agrawal commented, “These measures will enhance ease of doing business, boost exports and make India more competitive with respect to neighbouring countries, and attractive as an investment destination.”
The industry will also benefit from overall tax-reduction initiatives, including a corporate tax cut to 25 percent; a 15 percent tax for new manufacturing units; and improved export credit limits, which will make micro, small and medium enterprises eligible for priority sector credit benefits.
The government’s move is also expected to provide stimulus ahead of the Diwali festival in India, added Agrawal.