From import duty reduction to duty drawback on exports; here is what jewellery industry expects from Union Budget 2024

The jewellery industry in the country is optimistic about the upcoming budget and is hopeful that several of the concerns for the sector will be addressed. Here below are highlighted the key expectations:

Import duty reduction on gold, silver, platinum: In the Union Budget 2024, MP. Ahammed, Chairman, Malabar Group expects the Centre to slash import duties on precious metals, chiefly gold, silver and platinum bars. Currently, import duty on the precious yellow-metal is at 15 per cent which the industry demands to  be reduced to 10 per cent.

This reduction is essential to curb gold smuggling, which has seen an unprecedented increase. The duty reduction will also release the duty blockage, providing more working capital for the industry, noted Ahammed.

Introduction of Duty drawback on exports: The industry looks forward to the introduction of a duty drawback on exports that will help the industry to leverage the India-UAE Comprehensive Economic Cooperation Agreement, giving industry players a competitive edge, boosting exports, and generating employment in the sector. 

Exemption from tax on interest income realised on Sovereign Gold Bonds (SGBs): SGBs entitle their holder to be eligible for 2.5 per cent fixed interest rate annually that is paid twice a year. Currently, the period interest income is subject to tax under the head ‘income from other sources” and is taxed according to the applicable slabs.

Approval for diamond brokers and traders to operate in SNZs: Ahammed held that the industry expects approval for globally recognized diamond broking and trading houses to operate in Special Notified Zones (SNZs), enhancing their scope. 

The move will increase our global competitiveness, unlock the untapped export potential for gold jewellery, and contribute to the growth and sustainability of the jewellery retail industry, he added.