Industry sources said there are around 20,000 small jewellery manufacturing units employing around five to 10 workers per unit. These small units have annual business turnover of less than Rs 20 lakh. The job work units are not getting orders as the central government is yet to provide exemption on the inter-state taxable supply of job work under GST.
The All India Gems and Jewellery Trade Federation (GJF) has demanded that the government should immediately consider giving exemption to the inter-state taxable supply of job work to the small units having annual turnover of less than Rs 20 lakh.
GJF office-bearers said that a job worker making inter-state taxable supply of job work service was not eligible for threshold exemption of Rs 20 lakh and was liable for compulsory registration under GST.
In the 21st GST Council meeting held at Hyderabad, it was recommended by the council to exempt the above category of job workers engaged in making inter-state taxable supply of job work service to a registered principal from registration as long as the goods move under the cover of an e-way bill, irrespective of the value of the consignment.
However, this exemption was not extended to job work in relation to jewellery, goldsmiths’ and silversmiths’ wares covered under chapter 71, which do not require e-way bill.
Chairman of GJF Nitin Khandelwal told, “If the GST exemption to job workers located in different states is not given, the gems and jewellery sector won’t be able to fulfil the dream of PM Narendra Modi of promoting heritage jewellery in India. The goods sent to these artisans in Gujarat, Kolkata, Rajasthan etc. are by the principals who are generally located in other states.”
Chairman of Southern Gujarat Chamber of Commerce and Industry’s (SGCCI), gems and jewellery committee, Nainesh Patchigar said, “Surat is the hub of jewellery manufacturing in western India. Majority of raw material is sent from Mumbai followed by Ahmedabad and Madhya Pradesh for jewellery manufacturing. The GST exemption to small jewellery artisans has stopped the supply of raw material.”
Patchiagar added, “More than 50,000 jewellery artisans are sitting without any job work. If this continues for long, then they will be in a big trouble.”
Source: Times of India