Highlights of Union Budget 2021-22

Ref.No.GJEPC/Union Budget/Pol/2020-21

        1st February 2021 

TO: ALL MEMBERS OF THE COUNCIL

Sub: Highlights of Union Budget 2021-22

Dear All,

This is to inform you all that Smt. Nirmala Sitharaman, Hon’ble Minister of Finance and Corporate Affairs today announced the Union Budget for the financial year 2021-22.

The measures announced for Indian Gem & Jewellery Sector are as follows:

1. Changes in Customs Duty raw materials and inputs used by Domestic Manufacturers for reducing cost of inputs and correction of inverted duty structure:

S.No Specific Items Rate of Duty

From
To 1 Gold & Silver 12.5% 7.5%* 2 Gold Dore Bar 11.85% 6.9%* 3 Silver Dore Bar 11% 6.1%* 4 Platinum & Pallidum 12.5% 10% 5 Gold & Silver Findings 20% 10% 6 Waste & Scrap of Precious Metals 12.5% 10% 7 Spent Catalyst or ash containing precious metals 11.85% 9.2% 8 Precious metal coins 12.5% 10% * To attract Agriculture Infrastructure and development Cess at the rate of 2.5%

For better clarification, you may refer the below chart for gold duty:-

Illustrative: For Gold under heading 7108 Pre-Union Budget 2021 Post-Union Budget 2021 Change Nominal Import Value

100 Nominal Import Value

100

BCD 12.5% 12.5 BCD 7.5% 7.5

SWS 3% 0.375 AIDC 2.5% 2.5

SWS (excluding on AIDC) 10% 0.75

Total customs duties (excluding IGST)

12.875 Total customs duties (excluding IGST)

10.75 -2.13

Total value for GST levy

112.875 Total value for GST levy

110.75

IGST 3% 3.386 IGST 3% 3.323

Total Tax Incidence

16.261 Total Tax Incidence

14.073 -2.19

2. Changes in basic customs duty for creating level playing field for the benefit of farmer, MSME and other domestic manufacturers (with effect from 02.02.2021)

S.No Specific Items Rate of Duty

From
To 1 Cut and Polished Zirconia 7.5% 15% 2 Synthetic Cut & Polished Stones 7.5% 15%

3. Clarification on Equalisation Levy: In order to provide certainty, it is being expressly clarified that transaction taxable under income tax are not liable for equalisation Levy. Further it is also proposed to clarify regarding applicability of equalization levy on physical/offline supply of goods and services.  However, Council will be seeking adequate clarification from the Govt. to understand whether the above is applicable for online rough diamond auctions by mining companies.

4. In the budget 2018-19, Government had announced its intent to establish a system of regulated gold exchanges in the country. For the purpose, SEBI will be notified as the regulator and Warehousing Development and Regulatory Authority will be strengthened to set up a commodity market eco system arrangement including vaulting, assaying, logistics etc in addition to warehousing.

5. Revised the definition under the Companies Act, 2013 for Small Companies by increasing their thresholds for Paid up capital from “not exceeding 50 Lakh” to “not exceeding 2 Crore” and turnover from “not exceeding 2 Crore” to “not exceeding 20 Crore”. This will benefit more than two lakh companies in easing their compliance requirements.

Thanking you,

With best regards,

Sd/- SABYASACHI RAY EXECUTIVE DIRECTOR