The gems and jewellery sector has urged the government for a reduction in goods and services tax (GST) to 1 per cent on revenue equivalence ratio to ease the cost burden on the industry in the upcoming Budget.

"We seek rationalisation of taxes and availability of finance to support business," the All India Gem and Jewellery Domestic Council (GJC) Chairman Rajesh Rokde said in a statement on Tuesday.

With the continuously increasing gold rates, the current rate of GST is increasingly becoming a burden for the industry and end customers, he said.

Therefore, GJC is urging for a reduction in GST from the current 3 per cent to 1 per cent in the upcoming Budget, which will encourage compliance, Rokde said.

The tax reduction will enhance affordability for consumers, especially in rural areas, and most importantly, improve revenue collection by increasing the size of the formal economy, he added.

The industry apex body said there is a need to introduce a concessional GST rate for lab-grown diamonds to fully recognise their sustainable and cost-effective attributes compared to natural diamonds.

Currently, both natural and lab-grown diamonds are taxed at the same GST rate.

GJC further asked the government for a dedicated ministry and urged for state-wise nodal offices and appointment of a central minister specifically for the jewellery sector.

"We request the government to consider the EMI on jewellery, which has been a long-standing demand of the industry. Gold monetisation Scheme also needs a revamp as it has the potential to unearth idle household gold in the economy and thus helping us to be self-reliant and promote less imports," GJC Vice-Chairman Avinash Gupta said.

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