All Kerala Gold & Silver Merchants Association has requested the Union Finance Ministry to reduce the basic customs duty on gold to encourage domestic manufacturing and exports.
The recent increase in import duty from 7.5 to 15 per cent has significantly impacted production costs. The increased duty has resulted in additional taxation exceeding ₹9 lakhs per kg, said B.Govindan, president of the association.
In a pre-budget memorandum to the Finance Minister Nirmala Sitharaman, the Association said that a reduction in the GST rate on gems and jewellery to 1.25 per cent would make them more accessible to consumers and stimulate demand.
The Association also urged to raise the PAN card limit for mandatory quoting from ₹2 lakhs to ₹5 lakhs which would streamline transactions and reduce compliance burden. Increasing the cash purchase limit under Section 40A of the Income Tax Act from ₹10,000 to ₹1 lakh for claiming capital gains tax relief would incentivize transparency and discourage cash transactions.
There is also a need to introduce EMI options for purchasing 22 karat gold jewellery, promoting digital transactions while maintaining restrictions on bullion and coins.
There are also request to revamp Gold Monetization Scheme by exempting ancestral gold from taxation under GMS to encourage participation. The memorandum also requested to consider exempting tax for households depositing up to 500 grams of ancestral gold to increase participation.
There are also request to streamline processes to minimize physical movement of gold; encourage wider participation from banks to improve accessibility; partner with religious institutions to raise awareness about the GMS; reduce the minimum deposit requirement to attract a wider range of participants.