China reduces import tariff on eighteen jewellery categories from July 1

„Minimal impact on Sri Lankan gem and jewellery exports „SLGJA submits proposals to mitigate impact of gold import duty on industry

China’s import tariffs reduction of 18 on jewellery categories including gem and precious stones came into effect from 1st of July, following the reclassification of them as everyday consumer goods, according to the Guangzhou Diamond Exchange (GZDE).

According to a statement issued by the Customs Tariff Commission of the State Council of China, the average tariff drop for the 18 jewellery tax items would be 67.75 percent.

The import tariff rate for gold and silver jewellery products would be reduced from 20 percent to 8 percent, for platinum and other precious metal products from 35 percent to 10 percent, and for natural or cultured pearl products, gemstones or semi-precious stones products from 35 percent to 10 percent.

However, the apex body for gem and jewellery industry of Sri Lanka, Sri Lanka Gem & Jewellery Association (SLGJA) told Mirror Business that the tariff reduction would have a minimum impact on Sri Lankan gem and jewellery exports to China.

SLGJA, Chairman, A.H. M Imtizam pointed out that the duty component remains significant for Sri Lankan exporters though there is a significant reduction of tariffs in the jewellery category.

According to SLGJA, most of Sri Lanka’s gem and jewellery exports to China reach through Hong Kong and Chinese retailers purchase Sri Lanka gem and jewellery products at trade shows and other events. Imtizam said that the import tariff reduction would not be sufficient enough for Sri Lankan exporters to begin direct exports to China.

“Traditional method of exporting to Hong Kong will remain as the preferred method”, he said.

Shenzhen Rough Diamond Exchange has also pointed out that the new import tariff is only expected to impact the top luxury brands as those are generally the types of jewellery that are import as finished pieces into China.

Meanwhile, Imtizam revealed that SLGJA has submitted its proposals to mitigate the adverse impact on gem and jewellery industry after the government imposed a 15 percent import duty on gold last April. He noted that Central Bank of Sri Lanka (CBSL), Ministry of Finance and other relevant government agencies are studying the proposals submitted by SLGJA. Imtizam was hopeful that the government would come up with a solution soon.

The National Economic Council (NEC) also recently held a meeting to discuss the wide range of issues faced by gem and jewellery industry and the next NEC meeting on July 10th is expected to further discuss issues faced by the industry.

SLGJA has urged the government at the last NEC meeting to appoint NGJA representatives to the board of National Gem & Jewellery Authority (NGJA) in order to express the industry’s stance and to discuss issues faced.