Budget is fast approaching and one of the key sectors in focus will be the gems and jewellery industry. The recession is receding and new hopes for the sector are arising. One of the key figures of the industry, Mr. C. Vinod Hayagriv, Chairman, All India Gems & Jewellery Trade Federation has given his pre budget inputs keeping in mind the issues that deserve immediate attention.The GJF 20 point agenda with the centre in this forthcoming budget which include Pre budget recommendations of topical nature are as follows:
1. Allow gold to be imported under OGL (open general license) by any member of the All India Gems and Jewellery Development Council (the nodal official quasi government body) having a certain annual revenue earning or greater than 50cr. Thereby allowing jewellers/ jewellery manufacturers to import directly and lower costs and make a better return on high investments and intense competitive climate prevailing presently. Further allow trade body such as GJF to import gold for distribution to small jewellers at low cost (the turnover stipulation for trade body/ council specifically GJF to be not applicable as it is non profit).2. Make zero duty on gold imports so as to shift world trade to India. Indian importers will then import gold, scrap gold, set up refineries, refine the gold and supply to domestic trade and re export. There is an opportunity to make a brand 'India Bar' gold that the world will consume similar to Emirates or Swiss bars today. With the collapse of Dubai, if India does not act swiftly as above stated China will and snatch the only chance that is available today and move world trade to China. (Further the Asean Free-Trade Agreement that was signed for zero duty imports within Asean countries comes into effect in 2012, therefore if we were to do as above India could get a head start). Lastly if the duty is not bought down GJF demands that the Government allocate 25% of the duty so collected to be ploughed back to improve the trade in following measures stated herein below.3. Allocate 350cr for setting up jewellery parks to re habilitate craftsmen from city centre unhygienic buildings to scientific buildings/ parks with manufacturing/ testing/ hallmarking/ bullion banks/ safe keeping facilities/ shared machine shops/ etc.4. Allocate 75 crore for a National Festival to garner worldwide publicity for India's jewellery trade. GJF has plans to showcase Indian talent to the world, thereby improving the image and tourism for the country.5. Allow ID cards in the form of smart cards for easy safe transit of jewellery across country. Currently there is far too much harassment/ bribery/ hardship faced by the trade in transporting precious cargo in India. The centre needs to without fail recognize GJF identity cards that will reduce this completely. Although it seems so trivial this is an important and large hardship faced as couriers and postal dept is not adequately capable to handle transit of precious cargo. This is one our most vociferous demands from the govt. We need a resolution and GJF will work with the centre to solve this vexing issue.6. Reduction in bank rates for working capital rate of interest to sub 8% level from existing 11-12% pa.7. Reduction in bank rates of interest for gold loans to 2.50% level from existing 4.50% pa.8. Low cost housing loans for goldsmiths and craftspersons for homes below 15 lakhs.
9. Amend direct tax code in following 3 areas:
a. Search and seizure for jewellery establishments is very stringent and unhealthy - needs to strike out the provision for seizure of entire stocks if any discrepancy is found +
b. Tax on gross assets instead or tax on profits needs to be struck out + c. Provision that demands deduction of tax on purchases/ payments needs to be struck out.10. Pass the statutes and laws to enable gold jewellery to be mandatorily hallmarked. Presently the law in India does not allow mandatory provision to be enacted. Plus share the hallmarking bill with GJF to enable its implementation.11. Issue instructions to all states to allow one weights and measures calibration certificate to be recognized statewise. (Presently each city in the same state wants separate calibration certificate causing hardship to chain stores and travelling exhibitions etc).12. Maintain uniform VAT in all states at 1%.13. Under GST also keep gold and jewellery at lowest level of not more than 1%.14. Clarify that input tax credit is allowed for raw material sent out to other states temporarily for manufacture and return. (Presently some states are not allowing input tax credit when raw material is sent out to another state for manufacture and finished goods are returned).15. Abolish wealth tax completely.16. Exempt service tax on lease rentals for retail showrooms.17. Accord "industry status" for gems and jewellery trade.18. Increase mandatory statutory audit limit for small establishments to 2cr pa from present 50 lakhs as gold rates have gone up substantially.19. Abolish CST. And allow input tax set off for interstate transactions.20. Instruct states not to levy octroi is it negates uniform VAT principle.He believes the growth of the industry will continue to be bullish. He says ‘There is a need to protect the small jewellery businessman. Several small enterprises are finding it hard to exist with severe competition and margins squeeze with high cost of capital and high investments. Still if the centre were to implement our stated agenda, the gems and jewellery trade will grow beyond the 125000 crore we anticipated. We need proactive action by the centre quickly. GJF will assist in every way possible.’GJF is also working to remove unethical trade practices from the jewellery business. Says Mr Hayagriv‘First we are actually explaining to traders and members the aspect of ethics. We also publish the same in trade magazines so as to reach all over country. We have also made it mandatory amongst our GJF members. However I still feel it will take more time. Ethics is a bigger issue and it’s not easy as can be seen in other industries too. Piracy, plagiarism, under-invoicing, advertising ethics and honest representation in technical products such as jewellery are a challenge but GJF is working hard.’
About the All India Gem & Jewellery Trade Federation
The All India Gems & Jewellery Trade Federation is a national trade federation for the promotion and growth of trade in gems and jewellery across India. It is a federation that has come together, for managing various aspects of fair trade practices and efficient organization of business in the gems and jewellery industry. The All India Gems & Jewellery Trade Federation was formed in early 2005 to focus on the bigger picture. The Federation unites manufacturers, wholesalers, retailers and exporters all over India for a common interest. The Federation constantly organizes interactive trade meeting and seminars focused on the developments of the industry.
It successfully organized the world’s largest Jewellery festival -Lucky Lakshmi-08- India’s Jewellery Festival with incentives for the customers of assured gifts on every purchase. With the support of the Ministry of Commerce, the GJEPC and WGC (World Gold Council), GJF executed the festival in 207 cities from 22 states across India, in turn helping the industry in generating estimated revenue of Rs.10,000 crores in few weeks. The Federation supported FICCI for INTERNATIONAL BRAND CONCLAVE 2009, Theme - Vision & Trends, Focus Sectors - Gems & Jewellery.
About Mr. C Vinod Hayagriv
Mr. C Vinod Hayagriv, the Managing Director, C Krishniah Chetty & Sons, Bangalore’s premium jewellery destination is the Chairman of the All India Gems and Jewellery Trade Federation. Mr. C Vinod Hayagriv is responsible for the constant innovation and growth of C Krishniah Chetty & Sons and carrying forward its 140 years legacy. He is an Alumni Member of the Gemological Institute of America.
He is an On-call resource for the Beyde Jewels Association and also the founding member of the YPO since 1995. Before being appointed the Chairman of the All India Gem & Jewellery Trade Federation, he was a Director on the Board. He believes in leading by example and strives to create an environment of integrity and the highest ethical standards by ensuring fair business practices.
Mr C. Vinod Hayagriv
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