Jewellery sector hails exemption from money-laundering law

Our Bureau Mumbai | Updated on January 08, 2018

Festival cheer: With the new relief, the industry looks forward to good business during the festival season

Move expected to boost demand this festival season

The removal of gem and jewellery from the ambit of the Prevention of Money Laundering Act has come as a big relief for the sector which is reeling under the twin impact of demonetisation and GST.

Following the move, jewellers need not verify the identity of their clients by a KYC process for every transaction of ₹50,000 or more made through a single or multiple transactions.

The move will boost gold jewellery demand during the festival season — particularly in rural areas.

The All India Gems and Jewellery Trade Federation, the nodal trade body for the promotion and growth of trade in gems and jewellery across India, had made a series of representations with the Financial Intelligence Unit, Directorate-General of Goods and Service Tax Intelligence and NITI-Aayog highlighting the various concerns of the industry.

In August, the Central government through a notification, directed dealers in precious metals, precious stones and other high-value goods having a turnover of ₹2 crore in a financial year to be

notified as persons carrying on designated business and professions under the Prevention of Money Laundering Act, (PMLA) 2002.

As a consequence, various compliances under the PMLA were required to be undertaken by the gems and jewellery sector, which was to be overseen by the Directorate General of Goods & Services Tax Intelligence.

Nitin Khandelwal, Chairman of the Federation, said over the past 20 days the association had met each and every department and key personnels in the government with the support from various associations and chain store owners.

With the new relief, the industry looks forward to good business during the festival season.

Harpreet Singh, Partner, Indirect Tax, KPMG in India, said the relaxation for gem and jewellery industry would encourage free trading in the sector, without any apprehension of KYC compliances in the mind of the customer. This is one key sector which was adversely impacted post GST and hopefully the new decision should bring the smiles back on traders’ faces, he added.

Published on October 08, 2017

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