Gems and Jewellery

Our service offerings for the Gems and Jewellery industry

General:

  • The Gems & Jewellery Industry is one of the fastest growing segments in India
  • India’s export of Gems & Jewellery products (constituting cut and polished diamonds, gold jewellery, coloured gemstones, pearls, non-gold jewellery, synthetic stones, etc.)  is expected to generate a revenue of about US$ 35 bn in 2015
  • The domestic market is also robust at well over US$ 40 bn
  • India is the largest consumer of gold in the world and consumes nearly 20% of the world consumption. A majority of this consumption goes in making of gold jewellery
  • India has an abundant supply of skilled manpower suited for designing and producing high volumes of exquisite jewellery at low labour costs
  • Due to the very high export orientation of the industry, most of the large players have established their offices / subsidiaries / associates in nearly all the important trading centres of the world like USA, Singapore, Hongkong, China, UAE, Tokyo, Belgium, Tel Aviv, London etc.
  • India is the largest diamond cutting and polishing centre in the world and globally enjoys a 60% share in value, 82 % share in caratage terms and 95% share in terms of pieces
  • Effectively, 9 out of 10 diamonds sold worldwide are processed in India
  • India’s export of Gems & Jewellery products (constituting cut and polished diamonds, gold jewellery, coloured gemstones, pearls, non-gold jewellery, synthetic stones etc) was at US $ 21.2 billion in 2008 and is expected to be approx. US $ 20.1 billion in 2009.


Retail sector:

  • While recently there have been a growing trend of large business entities entering this sector, the Gems & Jewellery sector still continues to be dominated by small and medium sector entities
  • With a growing middle class, the market for branded jewellery is expanding substantially, with  many of the large players in the industry are setting up retail chains of jewellery showrooms across India which market gold (plain and studded) jewellery, fusion jewellery, diamonds etc.
  • With gold being seen as an investment alternative, the market for gold coins / bars has also increased substantially


Opportunities and Challenges

With the phenomenal increase in the growth opportunities and scales of business operated, the challenges have also increased manifold. Some of the significant challenges faced by the industry are:

  • Price risk of key raw materials
  • Foreign exchange risk
  • Security risk during mass scale production, handling and movement
  • Fast changing fashions, models, etc.
  • Credit risk
  • Country / territory risk for market concentration in few countries
  • Compliance risk has increased significantly as a result of the multinational operations of the industry
  • Ability of management in handling country specific challenges
  • In case of diamonds, concentration of rough diamonds supply with a few suppliers is a major challenge
  • Increased international and domestic vigilance by authorities considering Gems & Jewellery products (eg. gold, diamonds etc) being considered as sensitive goods
  • Scaling up the local systems and procedures to suit international standards and requirements
  • Products are more based on discretionary and impulsive buying and hence get affected first during any downturn

While the challenges are many, the industry also offers significant growth opportunities considering the future outlook.

How we can help

RSM in India has been involved in the Gems & Jewellery industry for over two decades and provides a wide range of professional services to this industry, viz:

  • Internal and management audits (including compliance audits)
  • International and Indian tax
  • Corporate advisory and structuring covering Tax / Foreign Exchange regulations, Double Taxation Avoidance Agreements (DTAA) regulations, Commercial regulations, etc.
  • Advisory and assistance in outbound and inbound Foreign Direct Investments from and into India, formation / re-structuring of Joint Ventures, Mergers and Acquisitions, etc.
  • Quality Management Systems covering compliance of standards defined by De Beers, Rio Tinto, etc.
  • Operations consulting covering lean management systems, JIT approach, inventory management tools, preparation of Standard Operations Manuals (SOPs), defining pre-agreed systems and procedures, etc. and assisting in their implementation
  • Financial process outsourcing
  • Transfer pricing
  • Information technology solutions covering data and process automation, assisting in the identification and implementation of software, ERP, etc.
  • Enterprise risk management enabling organizations to help identify, control and mitigate / manage risk across the organization
  • Company law compliance and commercial documentation
  • Executive search and recruitment

Advantage RSM:

RSM in India is considered as a Preferred Service Provider by the players from the Gems & Jewellery industry. We service a large number of industry players who are involved in the Gems & Jewellery industry (domestic focused as well as internationally focused) including a dominant portion of the Gems & Jewellery exporters. We cater to their professional services requirements both, in India and at their overseas locations. Further, given our national and international reach, we are able to provide the said services to our clients at all their business locations..

With our integrated and customized IT software solutions (insert hyperlink to service tier 1 of Information technology (IT) assurance and IT solutions) for the Gems and Jewellery industry we are one of the leading service providers of end to end IT solution, implementation services and management consultancy.

Our multi-disciplinary teams of professionals with expert professional knowledge in the fields of audit, tax, legal, Information Technology, HR, Operations Consulting, etc. and senior professionals possess extensive experience in catering to this industry. With a deep understanding of the various finer aspects of the Gems & Jewellery industry on a variety of fronts, we are in a unique position to offer a range of pragmatic and customized solutions to clients. Some of our credentials are given below:

  • RSM in India is consistently ranked amongst India’s top six accounting and consulting groups and globally RSM is the seventh largest audit, tax and consulting network
  • Extensive experience in advisory, taxation and accounting matters of the Gems & Jewellery sector across various functions and geographies
  • Multi-disciplinary team of professionals comprising of Chartered Accountants, MBAs, Engineers, Company Secretaries, CISA / DISA, Cost Accountants and Law graduates

Turnover exemption limit for E-invoicing under GST reduced from Rs. 20 crores to Rs. 10 crores effective from 1 October 2022

26 September 2022
The Government has further slashed the existing turnover limit for availing exemption from E-invoicing from Rs. 20 crores to Rs. 10 crores and the effective date notified for the said change is 1 October 2022. Thus, all taxpayers whose annual aggregate turnover exceeds Rs.

Supreme Court rules that gifting of freebies by Pharmaceutical Companies to medical practitioners is not allowable expenditure under the Income Tax Act, 1961

12 August 2022
Distribution of incentives (i.e. freebies) by pharmaceutical and allied health sectors industries to doctors, medical practitioners etc. and its allowability of claim as business expenditure in the light of Explanation 1 to section 37(1) of the Income-tax Act, 1961 (‘the Act’) has been one of most litigated issue.

CBDT Extends Safe Harbour Rules to Assessment Year 2022-23

12 August 2022
On 17 June 2022, Central Board of Direct Taxes (‘CBDT’) issued Notification No. 66 /2022/F. No. 370142/26/2022-TPL. Vide this Notification, the CBDT has extended the Safe Harbour Rules (‘SHR’) to Assessment Year (‘AY’) 2022-23 relevant to the previous year 2021-22.   

Extension of Due-date for filing of return in Form GSTR 3B for the month of April 2022 till 24 May 2022

12 August 2022
In view of persistent technical glitches faced by GSTN leading to non-updation of GSTR 2B report with supplier filings pertaining to April 2022 for several taxpayers, Central Board of Indirect Taxes and Customs (CBIC) vide Central Tax Notification No. 05/2022 dated 17 May 2022 has extended the due-date for filing of return in Form GSTR 3B till 24 May 2022.

MCA issues Companies (Indian Accounting Standards) Amendment Rules,2022 to be effective from 1 April 2022

12 August 2022
The Ministry of Corporate Affairs (“MCA”) notified Companies (Indian Accounting Standards) Amendment Rules, 2022 (“Rules”) vide Notification dated 23 March 2022. These Rules shall come into effect from 1 April 2022.

Jaipur Tribunal Rules that Mere reflection of higher income in Form 26AS not a reason to make additions to the returned income offered by the assesse

12 August 2022
Recently, the Hon’ble Income-tax Appellate Tribunal (‘ITAT’) bench - Jaipur in the case of M/s Shri Jeen Mata Buildcon Pvt. Ltd vs. the ITO has passed a verdict on 8 March 2022 in favour of the assessee and deleted the addition made based on mere reflection of higher income in Form 26AS of the assessee.  

Ruling pronounced by National Company Law Tribunal in case of Panasonic Group –GAAR not to interfere with the rights of the taxpayers to arrange its affairs tax efficiently

12 August 2022
Recently, Chandigarh Bench of National Company Law Tribunal (‘NCLT’) approved the scheme of arrangement (‘Scheme’) between Panasonic Group Companies under section 230-232 of the Companies Act, 2013 which provided for the amalgamation of the entities based on commercial rationale and factors like reduction in operating and marketing cost, economies in procurement, i

Supreme Court validates the reassessment notices issued under unamended section 148 of the Income Tax Act between 01 April 2021 to 30 June 2021

12 August 2022
Finance Act 2021 revamped the entire reassessment proceedings with effect from 01 April 2021, wherein the pre-existing regime was substituted with the corresponding new regime along with introduction of new section 148A of the Income Tax Act, 1961 (‘the Act’) and changes in time limitation for issuance of notices.  

Mohit Minerals Private Limited Supreme Court Ruling - No levy of IGST on ocean freight in case of import of goods on CIF basis

12 August 2022
In view of careful interpretation and analysis of the fundamentals of Constitution, the Supreme Court verdict in the case of M/s. Mohit Minerals Pvt Ltd has clearly etched its spot as one of the most significant rulings of the recent times.

Key Amendments passed in the Finance Act 2022 vis-s-vis Original Finance Bill 2022

12 August 2022
The Finance Bill 2022 was introduced in the Lok Sabha on 1st February 2022. On 24th March 2022, the Finance Minister, Nirmala Sitharaman, proposed about 39 changes to be made in the Bill and the same was passed by the Lok Sabha on March 25, 2022 incorporating such proposed amendments.

Suo motu Disallowance u/s 40(a)(i) or 40(a)(ia) does not exonerate the assesse from the liability u/s 201 of the IT Act

12 August 2022
As per the provisions of section 40(a)(i)(a) of the Income Tax Act, 1961 (‘IT Act’), if an assessee who pays a sum of money by way of interest, royalty, fees for technical services or any other sum to a person outside India or within India, fails to deduct and/or deposit TDS as per the provisions of Chapter XVII-B with the government, the amount so paid will be dis

Guidelines for removal of difficulties under section 194R of the Income Tax Act, 1961

12 August 2022
Finance Act 2022 inserted a new section 194R of the Income Tax Act, 1961 (‘the Act’), which mandates a person, who is responsible for providing any benefit or perquisite (whether convertible into money or not) to an Indian resident, to deduct tax at source at the rate of 10% of the value of such benefit or perquisi

Brief Note on Section 194R: TDS on benefit of perquisite in respect of business or profession

12 August 2022
The Finance Act 2022 has introduced section 194R of the Income Tax Act, 1961 (‘the Act’), which provides for deduction of tax (‘TDS') by any person who is providing benefit or perquisite (whether convertible into money or not) to an Indian resident arising from carrying out a business or profession carried out by such resident person.

Publication - Key Audit Matters: Sector-Wise Analysis - A Research Report

14 July 2022
SA 701 Communicating Key Audit Matters in the Independent Auditor’s Report has been applicable from audits for financial statements of listed companies since past 2-3 years. This auditing standard requires the statutory auditor to identify and report key audit matters (KAM) arising during the course of the audit.

Supreme Court rules that gifting of freebies by Pharmaceutical Companies to medical practitioners is not allowable expenditure under the Income Tax Act, 1961

1 July 2022
Distribution of incentives (i.e. freebies) by pharmaceutical and allied health sectors industries to doctors, medical practitioners etc. and its allowability of claim as business expenditure in the light of Explanation 1 to section 37(1) of the Income-tax Act, 1961 (‘the Act’) has been one of most litigated issue.

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