[🇧🇩] Jewelry Industry in Bangladesh

Source: https://thefinancialexpress.com.bd/trade/bajus-unhappy-over-imposition-of-higher-tax-vat-on-jewellery-in-proposed-budget

Bajus unhappy over imposition of higher tax, VAT on jewellery in proposed budget
Published :
Jun 09, 2024 21:30
Updated :
Jun 09, 2024 21:38

Jewellery traders on Sunday expressed dismay over the proposed national budget for FY2024-25, as it has failed to meet their expectations in encouraging the jewellery business in the country.

The 5 per cent VAT imposed on the sale of gold ornaments should be reduced to 3 per cent, they demanded. If implemented, Tk 10 billion of revenue will be collected from the jewellery sector, the jewellers said.

"The proposed budget has failed to meet the expectations of the jewellery industry. Although the NBR has repeatedly promised to address the problems and meet the demands of traders in the pre-budget meetings, there is no reflection of it in the proposed budget," said their association at a news conference in the city.

Bangladesh Jeweller's Association (Bajus) organised the conference and demanded their already proposed 15-point demand needs to be met in the proposed budget.

Bajus President Sayem Sobhan Anvir, Bajus General Secretary Badal Chandra Roy, Bajus spokesperson Dr Dilip Kumar Roy were present at the conference.

Although it has been repeatedly said that the manufacture and export of gold bars, coins and gold ornaments through legal channels will be encouraged, the import of raw materials and machinery related to this sector has been burdened with unequal duty rates, it said.

An unplanned source tax burden has been imposed on traders. The price of gold in our local market is always Tk 8-10 thousand higher than in the international market. One of the reasons for this is the unbearable duty rate on the import of raw materials and machinery.

Regarding the baggage rule in the proposed budget, Finance Minister Abul Hassan Mahmood Ali said, "In order to evade customs duty, passengers arriving from Middle Eastern countries bring gold ornaments with light designs on 24-carat jewellery. In that case, I am proposing to add the definition of gold ornaments in the case."

Bajus fully agrees with this statement of the finance minister, it said.

Currently, due to inflation and the dollar exchange rate, it costs around Tk 1,17,177 to buy 1 bhori of jewellery gold. Adding Bajus' fixed minimum wage of Tk 7,031 and 5 per cent VAT of Tk 6,210 brings the total price to Tk 1,30,418.

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[Saif]

Challenges and export potentials of Jewelry industry in Bangladesh.

 

[Saif]

Jewellery industry still depends on informal sources

The jewellery industry has apparently remained largely dependent on unauthorised channels for sourcing gold although there is no direct government bar on importing the precious metal.

www.thedailystar.net

Jewelry industry still depends on informal sources

Star file photo

The jewellery industry in Bangladesh has apparently remained largely dependent on unauthorised channels for sourcing gold although there is no direct government bar on importing the precious metal.

Industry insiders said the taxes on legally importing gold were high, which was the main reason companies felt more comfortable sourcing gold from unauthorised channels.

Companies source gold by taking advantage of the National Board of Revenue's (NBR's) baggage rules and through other informal avenues, they added.

In 2018, the government framed a policy on gold to boost its import, prevent smuggling and ensure greater transparency in its trade.

A year later, Bangladesh Bank (BB) awarded licences to 18 companies and a bank to import gold.

Between 2020 and 2021, the banking regulator approved the import of 306.76 kilogrammes of gold bars to 12 companies, including Diamond World Ltd, LaxmiJewellers Ltd, BDEXgold and Rotno Gold Corner, showed central bank data.

But till now, eight of those companies have imported only 133.37 kg of gold bars despite the huge demand for gold in the local market.

Of them, Diamond World, one of largest jewellery companies, imported 63.5 kg, Riya Jewelers imported 30.45 kg, Aroosa Gold Corporation imported 14 kg, Jarwa House Pvt Ltd imported 11.66 kg and Golden World Jewelers imported 7.82 kg, showed the BB data.

The yearly demand for gold in the local market stood between 20 tonnes and 40 tonnes, according to Gold Policy-2018.

About 80 percent of the demand is still met by smuggled gold, as per industry insiders, causing huge revenue losses for the government every year.

The tax on gold import needs to be reduced, otherwise imports through legal channels will not increase, opined Dewan Aminul Islam Shahin, vice-president of Bangladesh Jeweller's Association (Bajus).

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Exporting Gold, Jewellery: Bangladesh’s Shimmering Opportunity

In Bangladesh, the allure of gold transcends mere aesthetics; it is deeply embedded in the cultural fabric, serving as a symbol of prosperity, tradition and social status. For centuries, gold has held a revered position in Bangalee culture, woven intricately into traditions, weddings, festivals...

www.daily-sun.com

Exporting Gold, Jewellery: Bangladesh's Shimmering Opportunity
Publish: Friday, 16 February, 2024 00:00

M Munir Hossain

In Bangladesh, the allure of gold transcends mere aesthetics; it is deeply embedded in the cultural fabric, serving as a symbol of prosperity, tradition and social status. For centuries, gold has held a revered position in Bangalee culture, woven intricately into traditions, weddings, festivals and rituals. It symbolises not just wealth, but also purity and familial heritage, forming an integral part of people's lives and identities.

According to a report by the World Gold Council, Bangladesh boasts a long tradition of gold jewellery consumption, with an average annual demand of approximately 15 tonnes over the past decade. This consistent demand places Bangladesh among the top consumers of gold jewellery in South Asia.

Despite its cultural prominence, the jewellery sector in Bangladesh was historically considered informal. However, the proactive leadership of the Bangladesh Jewellers Samity (BAJUS) over the past few years has brought together some 40,000 jewellery traders under its umbrella, signalling a shift towards formalisation and global competitiveness of the industry.

Envisioning the future potential of the gold sector, one can draw parallels to the transformative journey of the ready-made garments (RMG) industry. With proper policy support and strategic investments, the gold industry has the potential to emerge as the country's leading foreign currency earner in the years to come. The ever-increasing global demand for gold and jewellery presents a promising opportunity for Bangladesh to position itself as a key player in the international market.

On the global stage, the demand for gold jewellery continues to soar, driven by the increasing affluence of emerging markets, particularly in Asia and the Middle East. The market size is projected to grow from 4.42 kilo tonnes in 2024 to 6.32 kilo tonnes by 2029, with a compound annual growth rate (CAGR) of 7.38%. Furthermore, the global jewellery market is anticipated to exceed $500 billion by 2030, presenting Bangladesh with significant opportunities for growth and expansion.

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Prospect of gold sector in Bangladesh

Bangladesh is one of the countries in South and Southeast Asia which is traditionally known as producer of finest quality gold ornaments and jewelleries. The artisans of this industry have a long reputation as producers of the finest quality gold ornaments and jewellery. Though it is one of the...

businesspostbd.com

Prospect of gold sector in Bangladesh
M S Siddiqui
21 Dec 2022 00:02:44 | Update: 21 Dec 2022 00:02:44

Bangladesh is one of the countries in South and Southeast Asia which is traditionally known as producer of finest quality gold ornaments and jewelleries. The artisans of this industry have a long reputation as producers of the finest quality gold ornaments and jewellery. Though it is one of the oldest industries in the country. It has not developed to its desired potential because of certain limitations which involved the non-availability of gold to the business, financial support and a local market. As a result, the industry has not developed in the area of technology, production process, designing and innovation of jewelry products.

The major constrains faced by the jewelley industry in Bangladesh is the supply of gold which is banned from import until government formulate policy and issue The Gold Policy 2018 to allow import of gold under certain strict regulation. Until propagation of the policy, the industry was depending upon supply of gold from passengers of middle east under baggage rule and smuggling by professional smugglers since the independence. Bangladesh since its inception in 1971 has not imported any gold until recent time. Before independence, the State Bank of Pakistan established a quota for import of gold but that had been cancelled but industry was running since independence. On the other hand, gold smuggling in Bangladesh is at a record high with the country emerging as a major route into neighboring India.

While looking back to the history, in 1986, a study was undertaken at the initiative of Micro Industries Development Assistance Society (MIDAS) as a part of its scheme to help promote the growth of small industries sector in Bangladesh to determine the present status and the feasibility of exporting 'Gold Jewellery'. They have observed that the growth and development of gold jewellery have not much prospect in the local markets. However, opening of export channels in this sector may help the industry to grow as a result of caving a broader profitable market. The export trade in gold jewelleries will not only help to earn of valuable foreign exchange for the country but also would provide the security of jobs for the already employed 2-3 lakhs of artisans in this sector.

In April, 1981 a team comprising the officials of the Export Promotion Bureau and representatives of the local gold jewellery trade visited Dubai and Abu Dhabi in connection with Export Fair held there. It was felt by the team during their visit that there exists a demand for the kind of jewelleries that Bangladesh exhibited in the fair in the country concerned and that there exists a potential for exporting gold jewelleries in that market.

In 1985 Bangladesh Bank for the first time formulated a scheme outlining the guidelines and procedures for exporting gold jewelleries from Bangladesh titled as "Jewellery Export Scheme". The Export Policy for 1984-85 identified jewellery as one of the new export products for development. Unfortunately, those efforts could not develop the sector until the Gold Policy 2018 has been issued by the government. Bangladesh government issue the Gold Policy 2018 for import of finished gold in the form of gold bars and finished jewellery but not import of gold ore. Subsequently in 2021 amended the policy and allow import of unrefined and partially refined gold and gold ore.

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