What do jewelers want from Union Budget 2026?
What's the story
The All India Gem & Jewellery Domestic Council (GJC) has urged Finance Minister Nirmala Sitharaman to consider its suggestions for the 2026-27 Union Budget . The recommendations focus on tax and policy measures to alleviate cost pressures, enhance compliance, as well as support the small and medium-sized jewelers in India's domestic market.
Objectives
GJC's proposals aim to address structural issues
The GJC's proposals are aimed at addressing structural problems that have worsened due to the steep rise in gold prices over the past year. The council said these higher costs have increased the effective tax burden on the consumers and tied up working capital for jewelers, even without any changes in tax rates.
Tax relief
Recommendations focus on GST rationalization
The GJC's budget recommendations are centered around five broad areas, including GST rationalization and direct tax relief linked to inventory valuation. A major demand is to cut the GST on gold and silver jewelry from the present 3% to either 1.25%, or a uniform 1.5% across the sector. The council believes this would help mitigate the inflation-led pressures and revive demand in middle-income and rural markets.
Additional proposals
GJC seeks refund mechanism for accumulated input tax credit
The GJC has also requested a refund mechanism for accumulated input tax credit on services or a cut in GST on services like rent, security, and logistics. These currently attract an 18% levy, which the council says has created an inverted duty structure for many jewelers. Other proposals include a clarification on the 5% GST rate applicable to jewelry job-work services and deferral of income tax on unrealized inventory gains due to gold price appreciation in FY26.
Tax exemptions
Calls for capital gains tax exemption
The council has called for a capital gains tax exemption when hallmarked jewelry is exchanged and reinvested. "A modest GST reduction, together with relief on notional inventory gains and job-work clarity, will bring millions of transactions back into the formal economy," said GJC Chairman Rajesh Rokde. He added that such measures would protect karigar livelihoods, and make jewelry an accessible savings asset for Indian households.
Tourism boost
GJC recommends immediate implementation of TGRS
Finally, the GJC has recommended the immediate implementation of the Tourist GST Refund Scheme at major airports to encourage foreign visitors to buy jewelry. Other suggestions comprise simplified compliance norms for MSME jewelers, regulation of digital gold, lower MDR on the credit card transactions, and enabling formal EMI options for hallmarked 22K jewelry.