ISLAMABAD: The Senate Sub-Committee on Commerce directed the Federal Board of Revenue (FBR) to brief the committee over taxation rules application on the gems and jewellery industry.

The committee meeting, chaired by Senator Fida Muhammad, also directed that members of the Sarafa Committee be called to give a holistic view of the industry. The committee reviewed the existing policies applicable to the industry.

The committee discussed various issues that challenged the industry, especially the policy on the import of gold into Pakistan, which is governed under the Entrustment and Self-Consignment Schemes. Under the scheme, a jeweller can export jewellery made from locally procured precious metals and gem stones and is allowed to realise 50 per cent of such export proceeds in the form of gold import.

The Ministry of Commerce (MoC) representative informed the committee that the ministry has been receiving representation from the gems and jewellery sector to review stringent policies to facilitate the sector. The ministry also received recommendations from the PM Task Force for Gems and Jewellery and the tax ombudsman regarding this matter. Accordingly, a gems and jewellery committee was formulated by the MoC to address the concerns. The panel consisted of representation from the commerce ministry, the FBR, the State Bank of Pakistan, and the Trade and Development Authority of Pakistan.

Proposals have been finalised for amendments, the committee was informed.

The committee was informed that zero per cent duty is currently being charged, in addition to 17pc sales tax, which has also been reduced to encourage jewellers to join the tax net. Given the current economic situation of the country, the ministry recommended that imports of gold be curtailed until the dollar stabilises.

Published in Dawn, August 11th, 2022