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GST Impact on Jewellery and Textile Exports

Impact on Jewellery exports post GST

The Commerce Ministry is apprehensive about higher than expected GST rate to be levied on the gems and jewellery and textiles segments which may make exports non-competitive since in the international market, the margins are fixed.

The Gem and Jewellery Export Promotion Council (GJEPC) has demanded 1.25% GST rate and is unequivocally against being placed in 5% GST slab. Plus, GJEPC also wants exemptions for diamonds to continue. Presently, majority of jewellery products are taxed at a rate of 2.5-3% which varies from state to state.

The GST Council has bracketed the textiles industry in the 12% GST slab which has disappointed textile manufacturers who wanted to be taxed in the lowest bracket of 5%. The Clothing Manufacturers Association of India fears compliance issues and believes that the industry cannot be taxed at a uniform rate since there are massive variations in the textile products ranging from hand loom to branded wear.

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