Barring excise duty exemption to branded jewellery, the union budget for 2009-10 has not provided any major relief to the crisis-hit diamond and jewellery sector.
“The budget is not much encouraging for the gems and jewellery sector. We were expecting several relief measures from the government, but are left with disappointment,” said, Vasant Mehta, chairman of The Gem & Jewellery Export Promotion Council (GJEPC).
Reduction in interest rates was one of the major demands of the industry, but nothing has been done in this regard. The gem and jewellery exporters’ demand to double interest subvention level from 2% to 4% was also not fulfilled, even though the scheme was extended by six months to March 2010.
“The budget has not met the expectations of gem and jewellery industry. The excise duty on branded jewellery has been abolished, but at the same time, import duty on gold and silver has been raised. The demand to reduce interest rates has also gone unheard,” leading diamond businessman Chandrakant Sanghavi said.
Under the budget proposals, Pranab Mukherjee doubled the import duty on gold bars from Rs100 per 10 gram to Rs200. The duty on other forms of gold (excluding jewellery) was also doubled from Rs250 per 10 gram to Rs500, while custom duty on silver (excluding jewellery) was increased from Rs500 per kg to Rs1000 per kg.
The revised rates will also apply to gold and silver, including ornaments that are not studded, when imported by a bona fide passenger as baggage.
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