All India Gems and Jewellery Trade Federation (GJF) has expressed their discontentment on the news that aired on 2ND January 2013 where the government announced that it is intending to increase the import duty on gold yet gain from 4% to 5%. The All India Gems and Jewellery Trade Federation (GJF) states that it has already submitted its recommendation to reduce the import duty on gold from 4% to 2%
The Gem and Jwellery Trade Federation’s Chairman Mr.Bachhraj Bamalwa, said “Import duty on gold was increased from 1% to 4% prior to and in the budget 2012-13.The smuggling of gold was practically nil before this period but have increased ever since the import duty has been increased. Gold worth Rs 942 crores was seized during a brief period of three months further increase in the import duty will encourage smuggling and the income generated from these activities might be used in various illegal activities, threatening the national security as well it will destabilize the overall economy of the country. Further, despite a steep hike in the import duty approximately 600 tonnes of god was imported into the country during the 1ST three quarters of 2012-2013 and the country’s trade gap has also not reduced and the governments foreign exchange reserve has also came down.
He further added “It is estimated that gold held by Indian household is 25,000 tonnes approximately since generations. The govt. must try to bring out this gold and utilize it by lending it to jewelers at a nominal rate of interest. If the government can bring out 10% of this gold deposits by way of an amnesty scheme and the same is lended to jewelers as working capita, the country would not require to import gold for a minimum of three years which will help in minimizing the trade gap and as well as bringing the gold price down”
He has also mentioned that ban must be imposed on banks selling gold coins. In most cases the banks forcibly sells gold coins to its high net worth clients and the gold keeps on lying idle with the consumers for years. Coins are not same as JEWELLERY and hence coin sales are similar to investment options and consumption is recommended to be reduced.
The federation urges the government to encourage, enact and speak positively on gems and Jewellery sector. The Gems and Jewellery sector is already facing the problem of sluggish economy and the skilled artisans are fleeing from the industry. It also requests the government to ban trade in ETF, e-gold, and Gold mutual Funds which are backed by physical gold till such time the current account deficit of the country is reduced to a satisfactory level.
About All Indian Gems & Jewellery Trade Federation
All Indian Gems and Jewellery Trade Federation is a national trade federation for the promotion and growth of trade in gems and jewellery across India. It is the nodal and the largest single trade body in India representing the over 3,00,000 jewellers, manufacturerers, wholesalers, retailers, distributors, laboratories and allied services to the domestic industry.