In an effort to make India an international trading hub for gems and jewellery, exporters have asked government to do away with benign tax assessments.

“Instead, centre must introduce the Presumptive Tax regime for exporters of gems and jewellery as suggested by the Sivaraman Committee appointed in 2006,” the Gems and Jewellery Export Promotion Council (G&JEPC) said on Thursday.

“We have asked government to withdraw benign tax regime and instead tax us under the presumptive tax regime for three years. Under this, exporters with profits in the range of 1-4 per cent would be liable to pay one per cent of their turnover as tax. This will help government to collect more revenue as exporters will be spared from the hassles of scrutiny,” Sanjay Kothari, vice-chairman of G&JEPC said. Kothari said the current diamond trading hubs like Belgium and Israel had earlier faced similar challenges in tax collection. However, with the introduction of presumptive tax regime there, these countries have emerged as one of the largest diamond processing and trading hub in the world.

“Since India has achieved the distinction of cutting 14 out of 15 diamonds sold across the globe, it is time for us to become a hub for diamond trading,” he said. Sivaraman Committee, formed in 2006 by the then finance minister P Chidambaram, had suggested that the presumptive tax regime, if implemented, would encourage more investment in the sector, retain skilled labour and capital, increase revenue, enhance global competitiveness of the industry as well as foster increased employment opportunities. “Further, government needs to either do away with import duty on various products as well as excise duty of 1 per cent on branded jewellery or come out with a clear definition with branded jewellery so that there is no confusion among jewellery manufacturers in the country,” Kothari added.