India’s Gold jewelry exports have fallen by almost 6% during April-November 2017 and may go down further as UAE will be magnificent 5% VAT from Jan 1st, 2018. UAE is amongst the most important importers of Indian jewelry and this tax imposition will make the jewelry price more for the clients.
Experts from the Gem & Jewellery Export Promotion Council (GJEPC) informed that the Indian jewelry exports had slashed down after the introduction of the 5% customs duty by UAE govt in the beginning of 2017. Now with the future imposition of 5% VAT by UAE govt, the Indian jewelry selling will be further impacted.
The VAT on gold and jewelry is being enforced when Dubai Shopping Festival is on and will be ongoing until Jan 27th and people across the globe will be gathering at Dubai to shop in it.
The GJEPC also does not see clearly as to whether the VAT enforced will also be appropriate to gold jewelry that will be re-exported from Dubai to other areas of the world. A large amount of Indian jewelry is directed to various international locations through Dubai.
As per the numbers of GJEPC, the gold jewelry export of the country has dropped by nearly 6% to Rs 14733.83 crore during the first 8 months of financial 2017-18. The specialists tell that all 5% VAT has been enforced on gold jewelry bought in Dubai have but 24-carat gold cafes will not be lead with VAT. The VAT guidelines tell that any gold product with % gold cleanliness in a tradable form in global marketplaces will have any VAT.
It is also not clear whether the gold coins will also bring 5%VAT expenses or not. The jewelry market seems that the VAT imposition may initially impact the gold jewelry exports as the clients will be reluctant to pay the improved costs. The benefit that Dubai had in the world market will certainly be impacted by this tax.