The All India Gems and Jewellery Trade Federation (GJF), the apex body of the jewellery retail industry in India, said it welcomed the government’s decision to keep the gem and jewellery industry out of the ambit of the Prevention of Money Laundering Act (PMLA).
GJF Chairman Nitin Khandelwal said the government decision was “really great news for the industry” and thanked the government. He added that the decision now led the industry to look forward to a good festival sales season.
The GJF said that it had, over the past few weeks, along with industry delegates, a series of meetings with the Financial Intelligence Unit (FIU), the Directorate General of Goods and Service Tax Intelligence (DGGSTI), the ruling BJP party president Amit Shah and the government’s National Institution for Transforming India, known as NITI Aayog, to represent their concerns over this issue.
The government had, in August this year, issued a notification classifying a dealer in precious metals, precious stones and other high value goods, with a turnover of ₹2 crore ($305,500) in a financial year, as a person carrying on a designated business or profession. As a result of this classification, the gem and jewellery sector had to ensure various compliance procedures overseen by the DGGSTI were carried out.
Critical amongst these, was the requirement for a reporting entity to verify the identity of its clients via a KYC (‘know your customer’) process, for every transaction of ₹50,000 ($765) or more. This applied whether the transaction was conducted as a single transaction or several transactions that appear to be connected.