Coimbatore Jewellery Manufacturers Association appeals to Union government for tax refund on gold metal loans taken before Customs Duty reduction, citing significant financial impact on local industry.
Coimbatore: The Coimbatore Jewellery Manufacturers Association has submitted a memorandum to the Union government, appealing for a refund of taxes paid on gold metal loans taken before the recent reduction in Customs Duty. This appeal comes in the wake of significant financial implications for local jewellery manufacturers.
The Association highlighted that jewellery manufacturers in Coimbatore purchase approximately 100 tonnes of gold annually. Prior to the recent budget announcement, manufacturers who obtained gold metal loans from authorised nodal agencies were subject to a Customs Duty of 15% along with GST. However, the government's decision to reduce the Customs Duty to 6% in the latest budget has created an unexpected financial burden for those who had already taken loans.
While the reduction in Customs Duty was generally welcomed by the industry, it has resulted in a substantial loss for manufacturers who had previously secured loans. The Association stated that manufacturers are now facing a loss of ₹5.53 lakhs for every kilogram of gold due to this policy change. In light of this situation, they have urged the government to consider refunding the additional duty paid by manufacturers.
The memorandum also included several other requests aimed at supporting the local jewellery industry. The Association has called on the government to refund 3% of the interest paid on loans to MSME jewellery manufacturers at the end of the year. This measure is intended to provide financial relief to smaller manufacturers who form a crucial part of Coimbatore's jewellery sector.
Furthermore, the Association has requested the establishment of a dedicated help desk in Coimbatore to promote jewellery exports. This initiative is expected to boost the city's position in the international jewellery market and provide necessary support to local manufacturers looking to expand their global reach.
Lastly, the memorandum included a request for the renewal of gold metal loans for a period of 360 days. This extension would provide manufacturers with greater flexibility in managing their financial obligations and production cycles.
The Association's appeal underscores the challenges faced by Coimbatore's jewellery industry in adapting to sudden policy changes. As one of the major jewellery manufacturing hubs in India, the outcome of this appeal could have significant implications for the sector's growth and stability in the region.
The Association highlighted that jewellery manufacturers in Coimbatore purchase approximately 100 tonnes of gold annually. Prior to the recent budget announcement, manufacturers who obtained gold metal loans from authorised nodal agencies were subject to a Customs Duty of 15% along with GST. However, the government's decision to reduce the Customs Duty to 6% in the latest budget has created an unexpected financial burden for those who had already taken loans.
While the reduction in Customs Duty was generally welcomed by the industry, it has resulted in a substantial loss for manufacturers who had previously secured loans. The Association stated that manufacturers are now facing a loss of ₹5.53 lakhs for every kilogram of gold due to this policy change. In light of this situation, they have urged the government to consider refunding the additional duty paid by manufacturers.
The memorandum also included several other requests aimed at supporting the local jewellery industry. The Association has called on the government to refund 3% of the interest paid on loans to MSME jewellery manufacturers at the end of the year. This measure is intended to provide financial relief to smaller manufacturers who form a crucial part of Coimbatore's jewellery sector.
Furthermore, the Association has requested the establishment of a dedicated help desk in Coimbatore to promote jewellery exports. This initiative is expected to boost the city's position in the international jewellery market and provide necessary support to local manufacturers looking to expand their global reach.
Lastly, the memorandum included a request for the renewal of gold metal loans for a period of 360 days. This extension would provide manufacturers with greater flexibility in managing their financial obligations and production cycles.
The Association's appeal underscores the challenges faced by Coimbatore's jewellery industry in adapting to sudden policy changes. As one of the major jewellery manufacturing hubs in India, the outcome of this appeal could have significant implications for the sector's growth and stability in the region.