Jewellery sector seeks taxation method change

The jewellery industry has sought the implementation of presumptive tax as a clear cut method of taxation and a reduction in duty on polished diamonds to give India a boost as a diamond trading hub, industry watchers said.

"One of the major demands is the implementation of the presumptive taxation regime," said Neelesh Hundekari, principal, AT Kearney.

Jewellery manufacturers are now taxed on their income. Introduction of a presumptive tax would mean that companies would be taxed on their revenue.

This would help in doing away with disputes on the valuation of inventory, Hundekari added.

"One of the concerns the trade and revenue departments have always had is the valuation assessment of profit," Ashish Goenka, managing director of Suashish Diamonds Ltd., said. The presumptive tax would be more clear cut, he added.

Diamond jewellery manufacturers are also seeking to reduce or completely do away with the 5 percent duty on polished diamonds.

This would aid in promoting India as a diamond trading centre and a consuming market, said Goenka.