India’s gems and jewellery industry has welcomed the latest Goods and Services Tax (GST) 2.0 reforms, describing them as a step towards greater trust, transparency and ease of doing business. The measures are expected to reduce compliance-related uncertainty, improve working capital and create a more supportive environment for jewellers, particularly small and medium-sized traders.
The All India Gem and Jewellery Domestic Council (GJC) said the reforms reflect the government’s commitment to building a more transparent and business-friendly tax framework.
“GST 2.0 is a landmark reform that ushers in a new era of trust, transparency, and efficiency for the gems and jewellery sector,” GJC Chairman said in a statement.
He added that the measures would strengthen industry credibility, safeguard livelihoods and support sustainable development across the country.
Higher Threshold For Arrest-Related Action
A key measure welcomed by the industry is the GST Council’s decision to raise the threshold for arrest-related action from Rs 1 crore to Rs 5 crore. The revised framework also requires approval from a higher authority before an arrest can be made.
According to Rokde, the changes could provide relief to small and medium-sized traders by reducing the fear of unnecessary harassment, while ensuring that genuine cases of tax evasion are addressed.
The move is expected to strengthen accountability and due process, offering businesses greater protection against arbitrary action.
Predictable Tax Changes To Improve Business Planning
The industry has also welcomed the proposed move towards a more predictable schedule for GST rate changes, with revised rates generally taking effect from April 1 rather than being introduced midway through the financial year.
A more consistent timetable could help jewellers plan pricing, inventory, accounting and tax compliance more efficiently, reducing uncertainty in a sector where working capital and inventory management are critical.
The council also highlighted measures aimed at facilitating the movement of goods in transit, accelerating automated refunds and ensuring fairer notices to reduce litigation and uphold the principles of natural justice.
Focus On Cash Flow And Compliance
The reforms also include rationalisation of penalties, a reduction in the general penalty cap and recognition of input tax credit (ITC) on employee insurance, according to the GJC.
These changes are expected to ease compliance pressures and improve the sector’s operating environment. Faster refunds, in particular, could help businesses unlock funds tied up in the tax system and strengthen liquidity.
“The withdrawal of arrest powers and the increase in prosecution thresholds will instil greater trust and confidence across the trade,” he said.
IGST Exemption On Precious Metal Imports Withdrawn
Separately, the GST Council has withdrawn the Integrated GST (IGST) exemption on imports of gold, silver and platinum by banks and nominated agencies. Such imports will attract 3 per cent IGST from April 1, 2026.
The change marks another important tax development for the precious metals trade, although its implications for individual businesses will depend on their import arrangements and tax-credit eligibility.
Overall, the GJC said the reforms would help reduce business disruption, improve working capital and protect livelihoods across the gems and jewellery value chain.
The industry expects the measures to support a more predictable compliance environment, allowing jewellers to focus on business expansion, innovation and customer service while contributing to the sector’s long-term growth.
Source from: https://www.businessworld.in/article/gems-and-jewellery-sector-welcomes-gst-2-0-reforms-cites-greater-trust-627810
