The council also urged that the Gold Monetisation Scheme be made more attractive so that the industry gets better access of domestic gold as raw material.
"The 10 per cent import duty on gold was levied to the curb current account deficit. Gold smuggling has been rife since India raised the import duty on the metal.
"Lowering the duty structure to 4 per cent will not only boost customer demand and uplift business sentiments for the trade, but also help industry become more organised and compliant," GJC Vice-Chairman Shankar Sen told reporters here.
The World Gold Council estimates that up to 120 tonnes of gold was smuggled into India in 2016.
"Reducing the custom duty could impact the exchequer to the tune of Rs 45,000 crore but it would curb smuggling of gold to a greater extent. Cost-benefit analysis suggests there would be more benefits if the duty structure is lowered," Sen said on the sidelines of the event to announce the council's flagship event 'Manthan 2019' to be held on July 2-3 in Mumbai.
He also said the sector is "moving towards a more organised and compliant business post-implementation of the Good and Services Tax (GST), and a lower custom duty on gold would encourage the fraternity to play a larger role in the development of the nation."
Cherished as both adornment and investment, Indian households own approximately 22,000 tonnes of gold and around 600-650 tonnes of the yellow metal is used in jewellery production each year.
"In view of this, we urge the government to make the Gold Monetisation Scheme more attractive so that the industry gets access to domestic gold as its raw material," he added.
( With inputs from IANS )