Mumbai: Transportation of rough and polished diamonds between Mumbai and Surat have come to a halt after the Goods and Services Tax department (GST) raided several angadias, or traditional couriers who ferry the goods between the two cities, according to a report published in The Tribune.
According to traders here, officials from the GST and Central Excise department raided more than 200 angadia firms in Mumbai and Gujarat that regularly carried rough and polished diamonds and cash between Mumbai and Surat. Nearly 250 packets of rough and polished diamonds worth nearly Rs. 100 crore were seized from the angadias, who did not possess GST registration documents of the clients on behalf of whom they were carrying the goods.
Central Excise department officials who confirmed the raids said they suspect tax evasion to the tune of more than Rs. 300 crore over the past few months. “Cutting and polishing of rough stones in one city and sale of the finished diamonds in another come under the GST and the tax will have to be paid by traders,” an official from the Central Excise department said.
A GST rate of 18 per cent is levied on cutting and polishing of diamond jewellery. The GST rate on finished diamonds is 3 per cent.
According to sources, diamond trade still operates through unofficial channels, with traders buying rough stones in the grey market and getting them polished in various cities in Gujarat where they have small-scale units employing scores of workers. The finished diamonds then find their way through exports. “Not only do these diamond traders avoid paying GST they are also out of the Income Tax net,” an official from the Central Excise department said.
Sources in the diamond trade say angadias, who were found carrying diamonds in their person, have been questioned and allowed to go. Some traders have also been questioned.
Meanwhile the diamond trade says most of the traders whose consignments were picked up by the investigating agencies were doing legitimate business. Their apex body, the Gem and Jewellery Export Promotion Council (GJEPC) is working with the central finance ministry and the GST Council to get the consignments released, according to traders.