Story Highlight
– GST for gems and jewellery remains unchanged at 3%.
– Government reforms expected to boost overall consumption indirectly.
– New GST structure aims to enhance disposable income for consumers.
– Optimism in jewellery industry for increased investment from buyers.
– Unchanged GST provides clarity, but costs still high for buyers.
Full Story
Jewellers have expressed their approval of the government’s recent decision to lower GST rates in various sectors, despite the fact that the GST for gems and jewellery remains unchanged at 3 percent. Industry stakeholders believe that this change could indirectly stimulate demand within the sector.
Rajesh Rokde, Chairman of the All India Gem and Jewellery Domestic Council (GJC), remarked to PTI that while the current GST reforms, termed GST 2.0, do not provide immediate relief for gems and jewellery exporters, there is potential for longer-term benefits. He noted, “The reforms do not offset the adverse impact of the US tariffs, since input costs and compliance burdens remain unchanged.” Nevertheless, he highlighted that the anticipated boost in consumption could positively influence the gems and jewellery market, especially with fiscal repercussions from the overhaul expected to amount to approximately Rs 50,000 crore.
At the recent GST Council meeting, the decision was made to maintain the existing rate for the gems and jewellery sector. GJC Vice Chairman Avinash Gupta expressed optimism about upcoming GST reforms, suggesting that these changes could enhance consumer disposable income through a mix of tax reliefs. “This dual benefit puts more money directly into the hands of households, encouraging aspirational purchases and lifestyle upgrades,” he stated. He further noted that the implementation of a simplified two-tier GST structure, along with reduced taxes on essential goods, is likely to enhance consumer confidence, particularly in anticipation of the festive season.
Gupta added that this scenario presents a significant opportunity for the gems and jewellery sector, as more consumers may be inclined to view jewellery as not merely decorative but as a sign of prosperity and financial security.
Saiyam Mehra, former GJC Chairman and director of Unique Chains and Jewels Limited, described the next-gen GST reforms as a significant turning point for India’s consumption-driven economy. “By streamlining tax slabs and easing the burden on essential goods, the government has empowered consumers with greater purchasing power,” he said. He believes that these reforms will rejuvenate interest in jewellery, making it not just a luxury item but also a valuable investment and cultural symbol, particularly appealing to young, authenticity-seeking buyers.
Conversely, Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions (RSBL), commented that while the GST Council’s decision to uphold the 3 percent GST on gold and silver and 5 percent on jewellery-making charges introduces some stability, it presents mixed outcomes for the industry. He explained, “For jewellers, it doesn’t change how they do business as there is no relief on margins, despite their hopes of getting a rate cut to stimulate demand.” He cautioned that persistent high costs could impact consumer affordability, especially during the festive shopping season.
Kothari indicated that the unchanged GST offers clarity for buyers and prevents market instability but noted that entry costs remain elevated compared to international standards. “On the one hand, the decision should defend the government’s revenue stream, but both jewellers and buyers may feel that their growth opportunities remain hindered,” he added.