The All-India Gem & Jewellery Domestic Council (GJC) has submitted a set of pre-Budget recommendations to Finance Minister Nirmala Sitharaman ahead of the Union Budget 2026-27.
The submission, sent this week, outlines tax and policy measures aimed at easing cost pressures, improving compliance, and supporting small and medium jewellers operating in the domestic market.
GJC, which represents India’s domestic gems and jewellery trade, said the proposals focus on correcting structural issues that have intensified following the sharp rise in gold prices over the past year.
According to the council, higher prices have increased the effective tax burden on consumers and tied up working capital for jewellers, even without changes in tax rates.
GST rationalisation and tax relief proposals
The council’s budget recommendations are built around five broad areas. These include rationalisation of GST, relief under direct taxes linked to inventory valuation, steps to strengthen formalisation, and faster implementation of existing schemes meant for the sector.
A key demand is the reduction of GST on gold and silver jewellery from the current 3% to either 1.25% or a uniform 1.5% across the sector. GJC said this would help offset inflation-led pressures and revive demand in middle-income and rural markets.
The council has also sought a refund mechanism for accumulated input tax credit on services, or alternatively, a reduction in GST on services such as rent, security and logistics, which currently attract an 18% levy. According to GJC, this has resulted in an inverted duty structure for many jewellers.
Other proposals include a formal clarification on the 5% GST rate applicable to jewellery job-work services, a one-year deferral of income tax on unrealised inventory gains arising from gold price appreciation in FY26, and capital gains tax exemption when hallmarked jewellery is exchanged and reinvested.
GJC Chairman said that “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, protect karigar livelihoods, and make jewellery once again an accessible savings asset for Indian households.”
Tourism, MSMEs and digital push
GJC has also called for the immediate rollout of the Tourist GST Refund Scheme at major airports to boost jewellery purchases by foreign visitors.
Additional suggestions include simplified compliance norms for MSME jewellers, regulation of digital gold, lower MDR on credit card transactions, and enabling formal EMI options for hallmarked 22-karat jewellery.
GJC’s Vice Chairman added that these steps would support formalisation, digital adoption and consumer trust.
The council remains open to working with the government to implement the measures and strengthen the sector’s contribution to the economy.
