In partial relief for gem and jewellery exporters, the government on Friday cut import duty on gold findings, a component used for holding ornaments, from the existing 10 per cent to four per cent, effective immediately.
Gold findings are small components such as hooks, clasps, clamps, pins, catch and screw back, used to hold the whole or a part of a piece of the jewellery in place. These are raw materials of the sector, imported to manufacture finished precious metal jewellery for export or domestic consumption.
The decision assumes significance as gold findings form a major portion of the value of small ornaments, especially in nose pins, earrings and other types of small price-sensitive articles. Generally, rigid and aspiring consumers opt for gold findings along with ornaments, while cost–sensitive ones prefer a mix of gold with allied metals, including copper.
The import duty on gold findings has been increasing over two years. In the Union Budget for 2010-11, it was first increased from Rs 500 per 10g to Rs 750 per 10g. This was increased on January 16 from Rs 750 per 10g to five per cent, subsequently increased to 10 per cent in the Budget for the year 2012-13, announced on March 16.
The gem and jewellery industry welcomed the move.
Rajiv Jain, chairman of the Gems & Jewellery Export Promotion Council, said, “The increased duty on findings had started depicting an adverse effect on the total export of jewellery from the country and has already raised a question mark on export of one category of jewellery where imported findings are insisted upon by foreign buyers.”
The industry expresses its gratitude to the government for showing faith and understanding in this industry, which contributes around 14 per cent to the export earnings of the country, he added.