Karachi, May 18, 2025 – The Pakistan Gems and Jewellery Development Company has submitted an extensive set of proposals for the upcoming federal budget 2025-26, urging the government to introduce critical reforms to ensure the survival and competitiveness of Pakistan’s jewellery exporters.
One of the most pressing concerns relates to the notarization and attestation process mandated under Clause 4(I)(ii) of SRO 760. Currently, exporters are required to have contracts notarized by foreign legal authorities and then attested by Pakistani Missions abroad—a cumbersome, expensive, and logistically challenging requirement. The industry has urged the Ministry of Commerce and the federal cabinet’s ECC to allow digital verification of contracts instead, using email confirmations and physical contract verification at the time of consignment delivery.
In another key proposal, exporters have called for an amendment to Clause 5(iv) of SRO 760, which mandates that 50% of export proceeds be realized in foreign exchange via normal banking channels. This condition disproportionately impacts exporters, as they earn profits primarily on the 5–10% value-added portion of consignments, not the gold content, which comprises 90–95% of the shipment. The exporters have recommended allowing 100% repatriation of export proceeds in either foreign exchange or precious metals, while requesting tax exemptions on the value of gold and wastage.
The jewelry sector has also highlighted disparities in the Sales Tax Act. Under Clause 6 of SRO 760, only gold imported under the Entrustment Scheme is exempt from sales tax, while imports under Self Consignment and unsold jewelry schemes remain subject to 18% GST. The industry has demanded that all schemes under SRO 760 be exempted uniformly to make exports viable.
Additionally, local jewelry manufacturers face a mismatch between the 18% sales tax paid on gold purchases and the 3% GST charged to customers on final jewelry products. To resolve this, the sector has recommended either reinstating S. No: 37 of the Sixth Schedule or introducing a reduced tax rate of 1% for local gold purchases.
Lastly, exporters are urging the government to replace percentage-based value addition norms with fixed rupee terms to account for gold price volatility. They propose setting flat rates of Rs. 100/gm for bangles, Rs. 150/gm for plain jewelry, and Rs. 200/gm for studded items.
These proposals aim to stabilize the jewelry export industry and make Pakistan more competitive in global markets.