Jewellery Business in India
India has a tremendous appetite for gold and diamond jewelry – creating one of the largest markets in the world for jewelry. Further, India is the largest import of gold in India and the gems and jewelry sector contributes nearly 6-7% of the Indian GDP – making it a sector. With India having a booming middle class and growing economy, the demand for gold is set to further raise in the coming years. Therefore, the jewelry business holds a lot of promise in the coming years.
The first step in starting a jewelry retail business is to come up with a brand name for your retail business, Get a Trademark for your business, Get a website for your Business, and Get your business registered as a private limited company, partnership, and LLP(Limited Liability Partnership). In this article, we look at the procedure for starting a jewelry business in India.
Globally, India is the largest consumer of gold. The gems and jewelry market in India is home to more than 500,000 players, with the majority being small players. Therefore, starting a jeweler business is one of the most profitable opportunities for beginners.
key Takeaways
- The first step in starting a jewelry retail business is to come up with a brand name for your retail business, Get a Trademark for your business, Get a website for your Business, and Get your business registered as a private limited company.
- In this article, we look at the procedure for starting a jewelry business in India.
- Hence, all jewelry businesses must have a VAT registration from the local state tax department.
- Each BIS license to sell hallmark jewelry is given for a particular retail premises or sales outlet.
Types of Jewellery Business
India’s domestic gems and jewelry industry was estimated to have a market size of about Rs.251,000 crores in 2013 with the potential to grow to Rs.500,000 crores by 2018. The entire gems and jewelry industry is set to witness a very healthy Compounded Annual Growth Rate (CAGR) of about 15.95% making it very attractive for investments. The Indian Jewellery Business can be divided into different types as follows:
- Retail Jewellery Shops
- Online Jewellery Retail
- Gold Trading
- Gold Importers
- Jewellery Manufacturers
Requirements for Starting a Retail Jewellery Shop
India has over 2.5 million jewelry shops, around 450,000 goldsmiths, and nearly 100,000 gold jewelers. Retail jewelry shops are very popular in India and research has shown that Indian consumers are less focused on buying branded jewelry as they rather prefer local ones more. Further, in India, nearly 96% of all Jewellery retail shops are family-owned small businesses making it an ideal sector for setting up a small business.
Business Registration:
Jewellery businesses tend to have large turnovers (Turnover above Rs.1 crore) easily. Hence, it’s recommended that jewelry businesses be registered as Pvt ltd companies to enjoy the benefits of limited liability protection, easy transferability, and more. Further, by incorporating a private limited company for the jewelry business, funds in the form of debt or equity can be easily raised.
Tax Registration:
The sale of gems and jewelry is taxable under VAT. Hence, all jewelry businesses must have a VAT registration from the local state tax department. Once, VAT registration is obtained, monthly/quarterly VAT returns must also be filed by the business on time to avoid penalties.
Import Export Code:
An Import Export Code or IE Code is required for importing goods into India. However, jewelers must be aware of all the regulations before importing any gold into India. Learn about the procedure for importing gold into India.
BIS License for Selling Hallmark Jewelry:
Hallmarking is the accurate determination and official recording of the proportionate content of precious metal in the article/jewelry. Hallmark is thus an official mark used in many countries as a guarantee of purity or fineness of precious metal in jewelry/artifacts. The principal objectives of the Hallmarking Scheme are to protect the public against substandard, adulterated products and to obligate manufacturers to maintain declared purity standards of fineness.
A jeweler who wishes to sell hallmarked jewelry must obtain a license from BIS for the particular retail outlet.
Each BIS license to sell hallmark jewelry is given for a particular retail premises or sales outlet. Therefore, one company that has multiple outlets must obtain multiple BIS licenses to sell hallmark jewelry.
After the grant of the license, the jeweler has to follow the terms and conditions mentioned in the agreement. In case of any deviations in the purity of precious metal (gold and/or silver) and observance of operations not in conformance to stated requirements may result in cancellation of the license and proceedings for penalties.
How To Export Jewellery From India?
Here is a list of the documents you will need to export jewelry from India:
- Permanent Account Number (PAN)
- Goods and Services Tax Identification Number (GSTIN)
- Importer-Exporter Code (IEC) by DGFT
- Authorized Dealer Code (AD code)
- PAN-based Business Identification Number (BIN) from the Customs departments
- Certificate of Origin
- Certificate of Insurance
- Registration cum membership certificate (RCMC) by GJEPC
You would also need a few more documents in addition to these, depending on the shipping method and the import nation.
GST On Gold
GST has a significant impact on metal. Based on various levels, rights to buying, and manufacturing, there are various GST rates for gold. Both the supply and the production of gold ornaments are subject to the gold GST. In India, there is a 3% GST on metal. Additionally, jewelers add a GST-making fee of 5% to the price.
Conclusion
If you have a large sum of money or can secure an excellent investment for the company, starting a jewelry business is unquestionably a great business idea. If done correctly, you can succeed at it and make a lot of money. Just remember to finish all procedures, particularly those that are legal and government-related.
