GJEPC’s leadership including Kirit Bhansali, Chairman; Shaunak Parikh, Vice Chairman; Sabyasachi Ray, Executive Director; and K.K. Duggal, Director – Trade & Policy, held a meeting with Smt Nirmala Sitharaman, Hon’ble Union Minister of Finance and Corporate Affairs, in New Delhi on 22 July to brief her on the current status of the gem and jewellery industry and discuss key policy priorities.
The Chairman thanked Smt Sitharaman for the Government’s continued support and invited her to visit IIJS Bharat Premiere 2026 and interact with India’s gem and jewellery exporters.
To strengthen the sector’s global competitiveness, GJEPC submitted the following key recommendations:
1) Include the gem and jewellery sector under the Sale from SEZ to DTA framework.
2) Permit reverse job work for SEZ units.
3) Promulgate the Risk Management System – (RMS) for Customs appraisal of gem and jewellery parcels to enable faster clearances.
4) Ensure uninterrupted availability of duty-free gold, silver and platinum for exports by notifying GST relief at the import stage for Nominated Agencies.
5) Notify IIGJ-Udupi as a Centre of Excellence for Skill Development to strengthen the industry’s talent pipeline.
The Hon’ble Finance Minister gave a patient hearing to the delegation and assured them that each of the issues raised would be examined.
Points to be discussed with Hon’ble FM
1) Non-availability of gold to exporters from banks due to IGST implications: The upfront IGST exemption was introduced primarily to ease the working capital burden of exporters. During the 22nd GST Council Meeting held on 6 October 2017, based on representations from industry, the Government agreed to provide this relief as an export facilitation measure. However, when the exemption was notified (initially under Serial No. 359A of Notification No. 50/2017-Customs), it did not specifically restrict the benefit to gold imported for export purposes. As a result, the exemption also became available for domestic bullion financing arrangements.
It is understood that the revenue authorities are now reviewing these domestic arrangements due to concerns relating to tax timing and possible revenue leakage. While domestic Gold Metal Loans (GMLs) defer GST until the gold is finally priced, the upfront Nil IGST exemption under Serial No. 198 allows imports without any immediate IGST payment even when the gold is meant for domestic use. In addition, differences between the customs valuation at the time of import and the actual transaction value at the time of sale create Input Tax Credit (ITC) reconciliation issues.
Unfortunately, these concerns relating to domestic transactions have also affected genuine export imports. As a result, imports under Serial No. 198 of Notification No. 45/2025-Customs have been held up, disrupting the supply of raw materials to export manufacturers.
To address the concerns of the revenue authorities while ensuring uninterrupted supplies for exporters, GJEPC proposes that the upfront Nil IGST exemption under Serial No. 198 of Notification No. 45/2025-Customs should be restricted exclusively to imports meant for exports. This can be implemented through the bond-based monitoring mechanism already available under Notification No. 57/2000-Customs, which provides adequate safeguards against diversion of duty-free gold into the domestic market.
2) Allowance of advance remittance by banks for import of precious metals: As per the RBI Notification dated 13 January 2026, advance payment for the import of precious metals, including gold and silver, is not permitted. In the gems and jewellery sector, these precious metals constitute essential raw materials used exclusively for the manufacture of jewellery. In the case of SEZ units, such imports are undertaken solely for value addition and subsequent export of finished gems and jewellery products. While Authorised Dealer (AD) Banks are otherwise permitted to remit foreign exchange without any monetary ceiling for imports, the restriction on advance remittances has been specifically imposed for precious metals. It is, therefore, requested that the matter may be taken up with the RBI to permit advance remittances by banks for the import of precious metals by SEZ units engaged in export-oriented manufacturing.
3) Allowing Sale of Gems and Jewellery Items from SEZ to DTA: SEZ units in the gems and jewellery sector require greater operational flexibility to manage inventory, optimise capacity utilisation and sustain operations during periods of subdued export demand. Due to the seasonal nature of global jewellery markets and fluctuations in international demand, SEZ units may accumulate finished goods inventory or pipeline stock, resulting in pressure on working capital and manufacturing continuity. The inability to efficiently liquidate inventory through the DTA restricts operational flexibility and increases financial stress on SEZ units, despite the fact that these units possess established manufacturing infrastructure, skilled manpower and export-quality production capabilities. Notification No. 11/2026-Customs dated 31 March 2026 allows concessional duty on the clearance of goods from SEZ units into the DTA. However, the gems and jewellery sector is not included under this framework. The gems and jewellery sector may be included under Notification No. 11/2026-Customs dated 31 March 2026. Such permission would enable SEZ units to efficiently liquidate inventory, manage working capital, optimise manufacturing capacity and maintain continuity of operations during periods of weak export demand.
4) Risk Management System: As you may be aware, 100% of gem and jewellery import parcels from key origins such as Hong Kong and the UAE are currently referred to honorary valuation panels. This practice has led to significant delays and operational difficulties, while also placing an undue burden on honorary trade valuers, whose availability is limited as they serve in a voluntary capacity. Further, Surat Customs has adopted an internal practice of referring all import parcels valued above ₹10 lakh, irrespective of the country of origin, to the valuation panel. Since rough diamond imports are typically of high value, nearly 80% of such consignments are subjected to this process. Even direct purchases from sight holders are being referred, despite these being primary market transactions that are difficult to value independently. The valuation process is time-consuming, delays clearance and manufacturing, and ultimately affects exporters’ ability to meet delivery commitments. At a time when the industry is already facing intense global competition, such delays adversely impact business operations and export competitiveness. The industry requests the inclusion of gems and jewellery sector under the Risk Management System.
5) Uniform SoP at all customs ports: Council has been representing that there are significant customs-related issues impacting the operational efficiency and export performance of the gems & jewellery sector. As highlighted previously, the absence of uniformity in interpretation and implementation of Customs procedures across ports and field formations continues to create procedural uncertainty, delays, and increased compliance burden for trade. Council has submitted a draft Standard Operating Procedure (SoP) for import and export of gems & jewellery through cargo mode, request if it may be considered.
Offical Facebook account of heerazhaveraat.com, homepage for Trade News, Articles and Promotion of D
Heera Zhaveraat (HZ International) A Diamond, Watch and Jewellery Trade Promotion Magazine provide dealers and manufactures with the key analytical information they need to succeed in the luxury industry. Pricing, availability and market information in the Magazine provides a critical edge.
