In a bid to increase manufacturing as well as exports, the central government in the coming budget is planning for tax incentives for the leather and gems and jewellery sectors. Finance Minister Mr. Arun Jaitley will unveil the budget on 29th of February.
- Leather sector is one of the main focus areas under Prime Minister Mr. Narendra Modi’s ‘Make-in-India’ initiative with an aim to increase its exports from a current $6 billion to $15 billion by the year 2020.
- According to sources, the Ministry of Commerce and Industry for the upcoming budget has recommended various incentives for the sector like removal of customs duty on imported leather machinery. The current customs rate lies at 26.5%.
- The ministry has also recommended for reducing excise duty up to Rs. 2,000 for all leather and leather related goods. It also has sought for an enhancement in the abatement rate from current 25% to a 35%.
- For gems and jewellery sector, the recommendations have been made to raise customs duty from a current 10% to 15% and complete removal of excise duty on imitation jewelry, from a current rate of 6%.
- It is understandable from these suggestions that the demand for Indian imitation jewelry is increasing throughout the world especially in countries like US and all European nations.
- If implemented, these recommendations can help in upgrading technology, modernizing capacity, expand the manufacturing sector and lastly, can come very handy in achieving the $15 billion exports target.