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Coimbatore Jewellers Seek Tax Reforms Amid Gold Price Surge

SimpliCity News Team · 09 Jun 2026

Coimbatore:

The Coimbatore Jewellery Manufacturers Association has submitted a set of recommendations to the Union Government, highlighting the challenges faced by jewellery manufacturers due to the sharp increase in gold prices and seeking policy reforms to support the sector.

Addressing reporters at the Coimbatore Press Club, association representatives said the unprecedented rise in gold prices has created significant capital constraints and financial risks for MSME jewellery manufacturing units. They pointed out that manufacturers are also facing taxation issues arising from the increased valuation of existing inventory.

The association stated that a detailed memorandum has been prepared outlining various reforms required to address the concerns of the industry. Among the key demands are the introduction of a replacement method, implementation of an export invoice mechanism for domestic sales, and permission to credit inventory gains into a separate reserve account in stock statements.

Other recommendations include introducing special provisions under ICDS, implementing a presumptive taxation system for micro and small jewellery manufacturers, and allowing the Last-In-First-Out (LIFO) method for inventory valuation.

Speaking to reporters, Coimbatore Gold Jewellery Manufacturers Association President Muthu Venkataram said gold prices have increased by nearly 140% over the last two years. He noted that businesses are currently required to file income tax returns using FIFO or Weighted Average Method accounting practices.

He further stated that many manufacturers are now being forced to utilize their working capital to meet tax liabilities arising from inventory valuation gains, creating financial pressure on small and medium enterprises.

The association has urged the Union Government to amend taxation provisions applicable to the jewellery sector. Muthu Venkataram said the memorandum prepared by the association will be submitted to Union Finance Minister and Union Commerce and Industry Minister Piyush Goyal for consideration.

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Coimbatore Jewellers Seek Tax Reforms Amid Gold Price Surge

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