All India Gems & Jewellery Trade Federation (GJF) Chairman Nitin Khandelwal has said, “Gold has a 5,000-year-old legacy in India and is not luxury but essential to the socio-economic framework of our country. Gold is used by rich and poor people for obvious reasons, and between 60 and 65 percent of business is generated by the rural segment.” He added, “The handcrafted jewellery business generates the second highest employment in India.”
Khandelwal was reacting to the statement by India’s Chief Economic Advisor Arvind Subramanian that a 3 percent Goods and Services Tax (GST) on gold was too low and needed to be increased as “it is consumed by the very rich.”
The GJF Chairman went on to note, “Low tax rates on gold will lead to greater transparency and compliance amongst jewellers, and the government can get to collect more tax.” He went on to say that the Chief Economic Advisor, was sending a contradictory, conflicting message within 45 days of the beginning of the GST era and that this would create confusion as it contradicted the research quoted by Indian Finance Minister Arun Jaitley and all the finance ministers of the various states.
Khandelwal stated, “All policy makers should continue to support earlier decisions made by government with respect to GST on gold that were arrived at through consensus and help industry stakeholders to mature, get more organised and successfully transition to GST regime.”