Gem, jewellery industry welcomes budget

The Association of Gem and Jewellery Industry of Sri Lanka last week commended the budget proposal for the reformulation of the taxation strategy relating to the gem and jewellery industry.

The Ports and Airport Levy (PAL) which was introduced sometime back on the importation of gems and gold was a big impediment to the legitimate importers. “We made several representations to the authorities on this matter. We note with concern and appreciation the government’s commitment to recognize the importance of the gem and jewellery sector in the context of generating high value addition, employment, foreign exchange earning and government revenue as spelled out in the budget speech,” the statement said.

The association acknowledged that Sri Lanka needs free importation of rough gem stones and other raw material mainly gold to develop the industry.

Gold, it said, is a commodity with a fixed international market price and imposition of taxes on gold imports created an imbalance in the raw material prices which the manufacturers were unable to cope with.

Diamonds imported for further dition) comprised of very high import values and the payment of a PAL at the time of import caused a great hardship even temporarily until refunds due to the high values, it said.

VAT on the jewellery manufactured was seen as a negative factor in the context of certain aggressive markets such as China and India the local industry had to compete with. The proposed to remove the PAL and reduce the VAT, therefore will have a good effect on the growth of income from these areas, it said.