Budget 2012 Effect On Online Shopping Industry & Jewellery In India
Finance Minister of India Pranab Mukherjee has granted a wonderful gift to E-Commerce entrepreneurs by making an important announcement to introduce GST by August 2012 in his Union Budget 2012-13 speech. For e commerce entrepreneurs, this is such a fantastic news as they are expect that with the implementation of the Goods and Service Tax(GST) prices of products sold online will come down.
At present most of the online commerce ventures are working on hub and spoke model and due to variations in tax across states they have set up warehouses in cities with low taxes. These locations are not apt for procurement and delivery of products but with the implementation of GST they can establish large warehouses with in most beneficial and optimal locations.
Every sector of trade is eyeing on the budget and has some expectations with it. If we talk about gems and jewellery sector, the latest news is that in the upcoming budget gems and jewellery exporters have asked for a more simplified tax regime to reduce litigations and motivate investments. An appeal was made by the diamond industry to Finance Minister Pranab Mukherjee to implement presumptive tax under which the industry is charged on an average rate of 1-3 percent of their profit margins.
According to Gems and Jewellery Export Promotion Council due to tough competition from countries like Dubai having tax free regime 80% of the diamond industry is earning an average profit of three months. Apart from this, the Council is seeking in reduction of levy on machines from 10% to 5% and import duty on rhodium from 2% to 0% along with ceasing 1% excise duty on branded jewellery.
People from Jewellery trade fraternity have pinned their hopes with upcoming Union Budget 2012-13, hope this budget may live up their expectations to the fullest!
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