This circular helps the entire Gems and Jewellery industry to appreciate the importance and significance of the meeting Chaired by our Hon. Minister of Finance Shri Pranab Mukherjee.

The meeting was held in the North Block, Chaired by the Hon. Finance Minister along with Shri. Gujral - Finance Secretary, Shri. S.K. Goel- Chairman CBEC, Shri Vivek Johri and all senior officers of CBEC and TRU.

Good Friday & Hanuman Jayanti on 6thApril marked a historic day for the gems and jewellery sector in India. GJF and 30 member associations across India were invited by Hon Finance Minister Shri Pranab Mukherjee for a closed door meeting.

Amongst members present were GJF, GJEPC, Gujarat Jewellers Association; Ahmedabad Jewellers Association,Bangalore Jewellers Association; Rajkot Jewellers Association;

Jaipur Jewellers Association; Maharashtra Rajya Sarafa Association, Rajasthan Jewellers Association; Patiala Jewellers Association, Swarn Shilp Bachao Association (West Bengal); Tamil Nadu Association; Kerala Jewellers Association; UP Sarafa Association, Delhi Jewellers Association, Coimbatore Jewellers Association and others.

The Finance Minister had lengthy discussions and representations were analyzed by the Finance Secretary and the Chairman CBEC. The Hon. Finance Minister listened to all the members patiently.

After all speakers had put their points across he promised all members that he understands the plight of the industry and promised categorically that the trade can surely expect favourable amendments in the Finance bill. He ensured the G & J sector will be happy and that he will respect the representations submitted by us all.

He advised all members to help him to help them. He advised that all protests be stopped and he will help to announce favourable action by May 11th 2012. FM’s assurance was such that all members have agreed unanimously to withdraw their strike and open businesses immediately. He also commented that he has given clear instructions to all commissioners not to take any cases against any jewellery establishments nor any jeweller be required to collect excise or register with excise. Any notices issued till date will also be set aside and no action shall be taken.

He also mentioned he wished to protect the craft and culture of the industry and had no intention to create trouble. He clearly empathized with the trade sentiments. He also graciously accepted a Coffee Table book signed by all members present at the meeting and appreciated the members decision.

Based on this excellent meeting GJF and all associations after the meeting had consent amongst themselves and unanimously agreed to withdraw/ suspend all agitations till finance bill is passed favorably. Later on we spoke to many associations across India and decided to call members and associations to open their businesses. We will keep you informed of further developments. We urge all businesses to open and respect the assurance given by the Hon Finance Minister.

As the assurance is a special instruction by none other than the most elderly statesman of the world's most populous and successful democracy, Shri Pranab Mukherjee's promise should not be doubted. His personal words were "Trust me. I will make you all happy".

This effort by GJF is a Initiative at the highest level of Government and hence should be viewed in the proper light. We as an industry must trust such initiative and assurances given by Government. The Finance Minister specifically drew reference and recommends industry not to resort to such pressure tactics. The Finance Minister needs to be trusted.

Hence kindly take this as positive confirmed news and open your businesses. All Associations please allow businesses to operate. We are confident that you will be benefitted.

Please Note: GJF and All Associations have asked for following from FM:

1. Complete abolishment of Excise Duty - on branded and un-branded jewellery.

2. Removal of Tax Collection at Source completely.

3. PAN card rule for cash transactions above Rs 10 Lac.

4. Reduce import duty on gold to 3%.

5. NRI baggage rules to restrict to 1 Kg gold and 10 kg silver at normal duty

6. Encourage manufacturing base of jewellery in country. FTA agreement to be reviewed

GIA (Gemological Institute of America) served as “Knowledge Partner” during Sparkle 2011 in Surat, an international exhibition that promotes the diamond trade. The show, held from Dec. 16-19 at the Surat International Exhibition and Convention Centre, was a part of the Vibrant Gujarat programme organized by the Southern Gujarat Chamber of Commerce and Industry. GIA conducted a series of seminars on each day of the trade show. Practical topics on diamonds, coloured stones, pearls and sales were covered.

"GIA has had a longstanding association and ties to the diamond industry in Surat," said Nirupa Bhatt, Managing Director of GIA in India and the Middle East. "This is the third consecutive year that we have participated at Sparkle and we hope this initiative will continue to provide relevant gemmological education to a wider scope of the trade community there."

Since 2008, GIA has built a strong presence in Surat by promoting education to trade professionals, manufacturers and retailers, providing lab services and teaching courses from its classroom at the Surat Diamond Association office in Varracha Road. GIA has also reached out to trade centres across the state, including Ahmedabad, Jamnagar, Palanpur, Mehsana, Navsari and Rajkot.

The Institute’s seminars for the diamond community are focused on the challenges posed by new gemstone sources, treatment processes and synthetic materials. All courses are continually updated to ensure information is timely and pertinent to the market and language assistance is provided to enhance understanding of technical concepts.

For additional information, email education.giaindia@gia.edu or call +91 22 4085 1599. GIA in India is located on 10th floor, Trade Center, Bandra Kurla Complex, Bandra (East), Mumbai 400 051. For more details, visit www.giaindia.in.

An independent non-profit organization, the GIA (Gemological Institute of America) is recognized as the world's foremost authority in gemmology. Established in 1931, GIA has translated its expert knowledge into the most respected gemmological education available. Early in the 1950s, GIA invented the famous 4Cs of Colour, Cut, Clarity and Carat Weight. In 1953, the Institute created the International Diamond Grading System™ which, today, is recognized by virtually every professional jeweller in the world. Through research, education, gemmological laboratory services, and instrument development, the Institute is dedicated to ensuring the public trust in gems and jewellery by upholding the highest standards of integrity, academics, science, and professionalism. For more information, visit www.gia.edu.

GIA (Gemological Institute of America) recently hosted its Board of Governors meeting in Mumbai. This was the first time the event has been located outside of the U.S.-based headquarters. Donna Baker, president and CEO of GIA; Thomas Moses, senior vice president of Laboratory and Research of GIA; and David Tearle, vice president and chief financial officer of GIA represented the Institute’s management at the gathering.

Members of the Indian gem and jewellery trade participated in the gathering to honour of the Board of Governors. The Gem & Jewellery Export Promotion Council (GJEPC), All India Gems & Jewellery Trade Federation (GJF), Bharat Diamond Bourse and the Export Promotion Council for the EOUs and SEZs (EPCES) presented an industry overview. The governors also met with industry leaders in the diamond city of Surat and the coloured stone city of Jaipur. While there, they toured manufacturing units, retail outfits and IIGJ Institutes in Mumbai and Jaipur.

“India is a significant global leader in the industry. Working alongside the trade community here is an integral element of GIA’s global campaign,” Baker said. “On behalf of the board, I thank the diamantaires and retailers of India for their hospitality and for supporting GIA’s mission. We are confident that this association will continue to prosper and grow.”

The GIA Board of Governors’ wealth of knowledge guides the Institute in its mission to protect the public trust in diamonds, gems and pearls through education programs, laboratory services and research discoveries. The governors come from various industry backgrounds, including gems and jewellery, legal and compliance, finance, management and marketing. Susan M. Jacques, president and CEO of Borsheims Fine Jewelry and Gifts, serves as the chairperson of the board.

The PMI program shall help the manufacture’s Improve market share with strategic goals and increase their benchmark for performance whereby decreasing marketing cost and pursue existing business relationships with an opportunity to develop new business paths.

“We are pleased that India was chosen as the first international location to host the Board of Governors meeting,” said Nirupa Bhatt, managing director of GIA in India and the Middle East. “This demonstrates the importance of the Indian market to GIA, and a commitment to delivering world class services to the gems and jewellery community.”

For more information about GIA in India, visit www.giaindia.in.

About GIA An independent nonprofit organization, GIA (Gemological Institute of America), established in 1931, is recognized as the world’s foremost authority in gemology. GIA invented the famous 4 Cs of Color, Cut, Clarity and Carat Weight in the early 1950s and in 1953, created the International Diamond Grading System™ which, today, is recognized by virtually every professional jeweler in the world. Through research, education, gemological laboratory services, and instrument development, the Institute is dedicated to ensuring the public trust in gems and jewellery by upholding the highest standards of integrity, academics, science, and professionalism. Visit www.gia.edu.

The All India Gems and Jewellery Trade Federation, today, formally announced the launch of Preferred Manufacturer of India 2011-2013. Among the many new projects to be launched a unique concept is the introduction of Preferred Manufacturer of India, to build the image and gain confidence of the manufacturing fraternity.

Speaking on this occasion, Mr. Bachhraj Bamalwa, Chairman said, “GJF is a body which has been working towards the streamlining of the gems and jewellery industry in India by encouraging and providing tools for the industry to run their businesses in an organized manner. In that direction, The PMI program benefits are a series of propositions that will act as a catalyst to achieve their business goals and shall recognize the value chain of our valuable industry”

A recent study by GJF revealed that there are three top most concern areas of the jewellery manufacturers which needs to be addressed by the GJF to improve their performance and growth, as a catalyst GJF shall play a vital role to organize the manufacturing segment of the Gems & Jewellery Industry.

Three top most concern areas of the jewellery manufacturers which shall be addressed, catered and customized in the PMI program are:

• Customer Relationship Management (CRM)
• Advertising & Marketing Platform
• Business Growth & Client servicing

The PMI program shall help the manufacture’s Improve market share with strategic goals and increase their benchmark for performance whereby decreasing marketing cost and pursue existing business relationships with an opportunity to develop new business paths.

In sync with its retail expansion plan, Tanishq, India’s largest branded jeweller today launched its Large-Format jewellery store in Pune. Located at Bund Garden, Opposite Central Mall , Pune, this all new store houses almost 20,000 exquisite jewellery designs in wide variety of traditional and contemporary designs. This enormous 12,000sq.ft. store was inaugurated by Mr. Bhaskar Bhat, Managing Director, Titan Industries Ltd.

To celebrate the occasion, Tanishq also announced a special inaugural offer, where customers will be gifted a half gram gold coin on their purchase of jewellery worth 15gm in gold and 15,000/- in diamond and above.

Speaking on the occasion Mr. Bhaskar Bhat, Managing Director, Titan Industries Ltd. said, "India is witnessing an overwhelming need for branded retail chains offering jewellery for every occasion. Identifying the requirement, we at Tanishq, plan to open large-format boutiques in select cities, which is a one-stop-shop jewellery destination offering wide range of products combining tradition with innovation across all price points and weight bands. Post launch in Chennai and Mumbai, we are now geared up to delight Puneites with world-class jewellery shopping experience at Tanishq Bund Garden store. "

Synonymous to the style and panache of the brand, this new architectural concept of the store is dedicated to showcasing fine jewellery collections. The store hosts iconic collections such as Taj Collection designs inspired from the Taj Mahal, Diamond of Class elegantly crafted designs in high value diamond jewellery for a distinctive appeal and style, Glam Gold exquisite gold pieces – all this, along with Diamonds starting at 1,999/-.

Besides this, a unique savings and investment scheme – Golden Harvest offered by Tanishq, can help the customers save a fixed amount every month and get a bonus at the end of the period. The boutique also provides skilled in-store jewellery consultants with thorough knowledge of jewels and gems. Besides offering the complete range of distinct collections, the store extends Tanishq’s widely acclaimed Certification of Authenticity, certifying the purity of Gold and the color, clarity and caratage of each diamond.

Dalumi, a leading player in the global diamond and jewelry industry, has strengthened its trade activities with the Indian market, with opening an office in Mumbai. DALUMI INDIA is located opposite Prasad Chambers, Opera House, Mumbai. The company believes the move would allow it to be at the centre of activity as the Indian Diamond Industry has come to be recognised as the world leader in the manufacturing of cut and refined diamonds and as the fastest growing diamond centre in the world. The Dalumi office in Mumbai will serve in assisting global buying teams and 'Providing us with swift access to both Indian diamonds and Indian clients', the company notes. It will also gain the advantage of India's excellence in jewellery and diamond manufacturing, by closely working with skilled jewelers in the northern and eastern regions. The local staff appointed in its Mumbai office will provide the needed 'Local familiarity' to the company's widespread international capabilities. 'This will enable us to leverage our combined strength to address both the global market and our local clients' the company notes.

Vasant Mehta, former Chairman of Gem & Jewellery Export Promotion Council (GJEPC) is appointed as part time director on the board of Export Credit Guarantee Corporation (ECGC) of India by Ministry of Commerce, Govt. of India. The appointment of Vasant Mehta is in the category of non-officials connected with exporters and is for a period of two years.

"I am happy to be part of ECGC board of directors. It will be my continuous endeavor to work in the interest of Indian Exporters"" said Mr. Mehta after his appointment.

Mr. Mehta is a second-generation diamantaire and has been involved in his family business for over 40 years. He is founder and senior partner of M/s. V. Rameshchandra & Co. In his capacity as the GJEPC Chairman from 2008-10, Mr. Mehta had played a significant role by undertaking measures to transform the Indian diamond manufacturing industry into a global jewellery manufacturing hub that boasts of quality & design oriented jewellery. As a representative of the GJEPC and as Vice President of International Diamond Manufacturers Association ( IDMA), he takes active interest in safeguarding the interest of Diamond Manufacturers and spreading the message of best practices in the trade.

Mr Mehta''s contribution in promoting and representing the Indian Gem & Jewellery fraternity in international forum has been commendable. Currently he serves as the Director of the National Skill Development Corporation (NSDC) set up by the Ministry of Finance , Govt. of India and is also a special advisor to China Diamond Industry.

Notes to Editor
The Gem & Jewellery Export Promotion Council is an all India apex body for Gem & Jewellery representing 5,300 members. Set up in 1966, it operates under the supervision of the Ministry of Commerce & Industry, Government of India.

The Union Budget 2011 has imposed an Excise Duty of 1% on jewellery and articles make of gold and/ or precious metals.

GJF has taken up the issue with concerned departments and ministries in New Delhi immediately. A 12-member GJF delegation met with the authorities on 4th and 5th March 2011.

We have been informed that the earlier circular dated 29th December 2005 and march 2005 are still valid until expressly rescinded by the Union Government. Therefore same is valid currently.

The officials also have stated that no officers/ departments are to collect excise duty from bonafide non-branded jewellers. If any unwarranted action or visits are undertaken by any departments in the country in order to collect in in appropriate manner where duty is demanded from unbranded jewellers/ products please report same to GJF office "info@gjf.in" or to the Mumbai address so GJF can inform the concerned authorities in New Delhi.

We also enclose the circular of 29th December 2005 for your records which you can show to any officers if required which is still valid.

However each jewellery establishment needs to take legal opinion where necessary and act accordingly as bonafide brands need to apply excise duty.

Hope this helps.

Some FAQ's:

• Coins : coins with brand name will attract duty. Bullion and bars do not attract duty.
• Names other than firm/ company marked with a name will attract duty.
• Unmarked jewellery : no duty.
• Duty is paid by manufacturer if he sells branded jewellery. With declaration letter from manufacturer retailer need not pay second time.
• Retailer or manufacturer may for branded jewellery pay at their option.

In a welcome move, the new Direct Tax Code (DTC) bill has removed the ‘Search and Seizure provision’ which was strongly opposed by the All India Gems & Jewellery Trade federation on behalf of the jewellery industry.

Section 139(2)(f) of old DTC, 2009 provided the clause: “The Authorized officer shall have all the powers to …seize any stock in trade of bullion, precious or semi-precious stones or jewellery, found as a result of such search.
” With the seizure of such stock-in-trade of jewellery, bullion and precious stones, the assesses of the GJ industry would face cessation of their manufacturing operations and subsequent loss of sales, which it believed was a total discrimination towards a single industry.

Under New DTC Bill, 2010, clause 135(2) deals with powers of Authorized officer during search and seizure proceedings. The provision relating to seizure of stock-in-trade of jewellery, bullion and precious stones has been removed from Clause 135(2).

The move has bought joy to the jewellers as the clause could have created great difficulties for the industry disrupting their entire business activity and for this reason, the GJ industry had been strongly opposing this. GJF, a national body of the jewellery trade had made representations to the Finance ministry to seek modifications in the DTC.

It may be recalled that the finance ministry of government of India, during its last Budget- 2009 has made a commitment to work at bringing about structural changes in the direct tax system by releasing a new DTC to consolidate and amend the law relating to direct taxes. Pursuant to this, a Draft DTC along with a Discussion Paper had been released to the public for debate in 2009. Based on the inputs received, the Government had proposed to finalize the DTC Bill for its introduction in the Parliament. However, the implementation of this new DTC legislation has been deferred by the government and is slated to come into force only from April 2012-13 financial year.

India owns over 18,000 tonnes of above ground gold stocks worth approximately $800 billion and representing at least 11 per cent of global stock, according to estimates of World Gold Council.

This is equivalent to nearly half an ounce of gold ownership per capita, a figure which is significantly below consumption in Western markets, representing scope for additional future growth", says a WGC research paper entitled 'India: Heart of Gold'.
In 2009, total Indian gold demand reached $19 billion, or Rs 974 billion, which accounts for 15 per cent of the global gold market, according to WGC.

India ranks 11th in the world in terms of gold reserves. Over the past ten years, the value of gold demand in India has increased at an average rate of 13 per cent per year, outpacing the countrys real GDP, inflation and population growth by six per cent, eight per cent and 12 per cent respectively.

"India is the largest gold market in the world and, as such, the likely recovery of local gold demand to pre-crisis levels is of considerable strategic importance to the wider gold market. Gold is an integral part of Indian society and a foundation of wealth and savings in India," Eily Ong, Investment Research Manager at the WGC, said.

As consumers have adjusted their price expectations upwards, a further rise in gold jewellery and investment demand is anticipated and this trend is projected to continue over the long-run as local investors are buying gold driven by wealth accumulation motives," Ong said.

Over the past ten years, the value of gold demand in India has increased at an average rate of 13 per cent per year, outpacing the country's real GDP, inflation and population growth by 6 per cent, 8 per cent and 12 per cent respectively.

The country currently has one of the highest saving rates in the world, estimated at around 30 per cent of total income, of which 10 per cent is already invested in gold.