Indian Jeweller (IJ) Magazine August -September 2019

AssociAtions & trAde bodies
Jaipur Jewellers
Association
welcomes waiving
of iGst on reimport
of gems
and jewellery
Industry Steering Committee
releases blueprint for spot gold
exchange in India
The Industry Steering Committee released its report on the
need for a spot gold exchange in India as it was informed
that India currently has few commodity exchanges. These
operate as futures exchanges which are primarily used to hedge
against gold price risk and take proprietary positions on gold price
movement.
A spot exchange, on the other hand, focuses on price discovery
and hence, provides the entire ecoystem around physical
deliveries. India is the second largest consumer of gold globally
with an annual gold demand of approximately 800-900 tonnes
and holds an important position in the global markets. However,
the domestic market is plagued by challenges such as lack of
quality assurance, weak price transparency and high market
fragmentation.
A gold spot exchange can address these challenges and
eliminate resulting market inefficiencies. The Committee
proposes setting up of Bullion Exchanges that would provide an
efficient and trusted ecosystem for trading gold and ensure the
success of financialisation of gold, with an aim to improve market
transparency, protect the interests of market participants and
facilitate India to emerge as a price setter for gold.
Catering to stakeholders across the gold ecosystem, the
exchange could transform India’s gold market, enhance the wider
economy and drive India’s status on the global gold stage. As such,
the gold spot exchange has drawn support from policymakers,
industry leaders and investors.
In February 2018, for example, the Union Budget address from
India’s Finance Minister stressed that a gold spot exchange was a
key government aim. On the back of extensive consultation with
market participants and learnings from leading global and Indian
exchanges, the report sets out a detailed blueprint for the gold
spot exchange, covering the key aspects for effective delivery.
The Jaipur Jewellers Association welcomed
the finance ministry’s decision to waive
off the IGST on re-import of gems and
jewellery dispatched to foreign nations for
the purpose of being showcased in the global
exhibitions and trade fairs. Earlier, the gem and
jewellery being dispatched even for exhibition
and consignment was attracting the IGST on
their re-import.
Association President Sanjay Kala said, “The
finance ministry’s indirect tax department on
Thursday gave a
big relief to gem &
jewellery exporters
by announcing
that the jewellers
shall not have to
pay the IGST again
on re-import of
gems and jewellery
which were sent
to foreign nations
to be showcased
in international fairs and exhibitions. Jaipur
Jewellers Association along with the Gem and
Jewellery Export Promotion Council have been
raising this issue with central government for
quite a long time.”
The exporters shall now be able to carry their
gems and jewellery on the basis of delivery
challan meant for approvals and can then
adjust the delivery challan with the jewellery
re-imported within six months of its issuing
date. In the last few months, the jewellers had
reduced the quantity of gems and jewellery to
be sent to foreign nations for exhibition/trade
fairs due to levying of GST on returned goods
which brought in quite a decline in export
business. Now the decision taken by finance
ministry is sure to boost our business, said
Kala.
46 | august-september 2019 | INDIAN JEWELLER