The Nepal Gems and Jewellery Association has appealed to the government to remove the Value Added Tax (VAT) imposed on diamonds and precious stones. According to the association’s chairman, Sumanman Tamrakar, VAT has resulted in diamonds being 12 percent more expensive in Nepal compared to India, putting domestic businesses under significant strain. He stated, “Due to VAT, diamonds and precious stones are 12 percent costlier in Nepal than in India, prompting Nepali customers to purchase these items from Indian markets.”
The association explained that since the current fiscal year’s budget introduced VAT on these commodities, the business sector has been effectively paralyzed. Tamrakar also highlighted that unauthorized imports of diamonds and precious stones from India have grown, yielding substantial profits and increasing smuggling activities. He added, “While the government’s revenue has increased due to VAT, thousands of entrepreneurs and millions of workers are facing threats to their livelihoods.”
With the price of gold hovering around NPR 300,000 per tola, Tamrakar pointed out that the daily payment limit of NPR 300,000 via QR code is inadequate. He emphasized the need to abolish the import quota system for gold and allow the private sector more freedom. Furthermore, the association has demanded permission for jewellery business operators to open foreign currency accounts in banks to deposit earned foreign exchange.
