VAT Inclusion In The UAE May Impact Gold Market In Terms Of Export Figures
The pressure on gold jewelry exports, which has fallen by 6% in the opening eight months of the current fiscal year, might get increased. Among the big buyers of Indian Jewelry, the UAE is charging 5% VAT from January 1, which would make it costlier for jewelers and shoppers there.
Praveen Shankar Pandya, chairman of the Gem and Jewelry Export Promotion Council, said in an interview, “From the beginning of this year, imposing 5% customs duty of the UAE Government has already reduced gold jewelry exports. More than half of the jewelry manufactured in India is exported to the UAE. Industry executives stated that the VAT on diamond and gold jewelry will be implemented when shoppers from all over the world will gather there for the Dubai shopping festival. The festival, which began from December 25, will run until January 27. Pandya said that there is no clerical about the fact that VAT will also look at the gold jewelry which will be re-exported through Dubai to the rest of the global markets.
In fact, Indian jewelry is exported to the world’s corners through Dubai. Pandya said, “We are awaiting clarity from Dubai this week.” According to GJEPC data, gold exports fell 6% to 14,733.83 Crore in the first 8 Months of the current fiscal year.
According to industry executives, all gold jewelry sold in Dubai is expected to cost 5% but no VAT will be levied on 24-carat gold bars. According to the VAT Guidelines, there will be no VAT on 99% of Gold Trade in International Markets.
Rajeev Popli, Director of Popli and Sons, a Dubai-based businessman said, “Dubai retailers have already adopted VAT system and have registered with the respective authorities. But the price of jewelry may lead to customer’s hesitation. There will be a reduction in the competitiveness of Dubai in the global market.
They believe that export of plain jewelry from India may also fall.