Industry & Economy
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Gems & Jewellery
Call to scrap 2 pc excise duty on branded jewellery
K.R. Srivats
New Delhi
,
April 22
THE Gem and Jewellery Export Promotion Council (GJEPC) has urged the Finance Minister, Mr P. Chidambaram, to do away with the 2 per cent excise duty levied on branded jewellery in the Union Budget for 2005-06.
A senior GJEPC official said that the Council has made a submission to this effect to the Finance Ministry.
GJEPC officials highlighted that the 2 per cent excise duty on branded jewellery might discourage the creation of brands in a fragmented jewellery market.
They also said that the total domestic market for branded jewellery is around Rs 1,000 crore.
Following the banner of protest raised by the jewellery trade soon after the Budget pronouncement, the Finance Ministry had in the first week of March clarified that the duty would be applicable only if the jewellery is manufactured and sold under brand names.
The Revenue Department had also held that "hallmarking" would not be considered as "branding" for the purpose of excise levy. Hallmarks are only official marks used as a guarantee of purity or fineness of gold jewellery and cannot be treated as "branding" for the purpose of the excise levy.
The creation of brands is considered to be crucial for enhancing the value of jewellery exports from the country. Interestingly, exports of gem and jewellery have been identified as one of the thrust sectors under special focus initiatives in the existing foreign trade policy.
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