The gems and jewellery has sought reduction of gold import duty to 4 percent, cut and polished diamonds and cut and polished gem stones to its 2.5 percent and relaxation of credit norms for working capital requirements in the forthcoming budget.

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All India Gem and Jewellery Domestic Council (GJC) chairman Anatha Padmanabhan in a letter to finance minister Arun Jaitley said the 10 percent import duty on gold was levied to curb current account deficit (CAD).

India's trade deficit narrowed more-than-expected to $12.96 billion in June, 2017, but the increased import duty on gold has given rise to the grey market, he added.

He said, PAN card limit should be raised to Rs 5 lakh from Rs 2 lakh.

As the PAN card holders are not even 50 percent of our population and making it mandatory for purchase of gold jewellery above 2 lakh is difficult in rural areas especially as customers are either reluctant to share or do not have one, he added.

Meanwhile, Gem and Jewellery Export Promotion Council (GJEPC) chairman Pramod Kumar Agrawal urged the government to reduce import duty on cut and polished diamonds as well as on cut and polished gemstones to 2.5 percent from the current 7.5 percent.

He further asked the government to allow 5 percent of the FOB (free on board price) value of exports of cut and polished diamonds to be re-imported duty free in the preceding licensing year for the exporters.

GJEPC urged the government to change income tax regulations enabling foreign mining companies to sell rough diamonds through special notified zone.

"We also seek authorities to notify GST rate of 0.25 percent on input services (at least job work services and grading and certification services) and extend benefit of inverted duty structure to such services also.

The GJEPC asked for an conducive banking environment for exporters of gems and jewellery sector in terms of relaxing credit norms for working capital requirements.

"We also urge the government to introduce interest subvention of 5 percent on export finance for the gem and jewellery sector," he added.

India Bullion and Jewellers Association (IBJA) director and national vice president and PNG Jewellers CMD Saurabh Gadgil said he hoped elimination of commodity transaction tax (CTT) will curb 'dabba' trading.

Kalyan Jewellers chairman and managing director T S Kalyanaraman said, he is expecting an uptick in discretionary consumable spends due to the expected move of increasing the tax exemption slab to Rs 5 lakh.

This will augment disposable income and contribute to enhanced spending in items like gold and jewellery and other consumable sectors, he added.