Mumbai: Starting January 1, the UAE (United Arab Emirates) will impose a 5% VAT on most goods and services, including rough and polished diamonds and gold. Now, Praveen Shankar Pandya, Chairman of the Gem & Jewellery Export Promotion Council (GJEPC) says that the tax will hurt gold jewelry exports from India as the UAE is one of the major buyers of Indian jewelry.
Mr. Pandya said to Economic Times, “Exports to the UAE have already dwindled after the government imposed 5%t customs duty on gold from the beginning of the year. Now the UAE government will be introducing 5% VAT which will further affect sales. More than half of plain gold jewelry manufactured in India is exported to the UAE”.
Recently, Dubai Diamond Exchange Chairman Peter Meeus voiced criticism of the new 5% value added tax (VAT) on loose rough and polished diamonds, saying “it has created huge waves both in the UAE and in India which imports and exports from Dubai”. Ahmed Bin Sulayem, Chairman of the Dubai Multi Commodities Centre (DMCC), is also said to be critical of the 5% tax, “saying it went against the principles of a tax-free setting for diamond trading”.