Mumbai: The sharp cut in the rate of GST (Goods and Services Tax) on polished diamond has brought much cheer to processors and jewellery exporters.
Around 94 per cent of the diamonds processed in the country would attract 0.25 per cent GST effective Friday, down from three per cent earlier, following the GST Council’s decision in this connection on Thursday. The remaining six per cent of diamonds processed in India and sold directly to consumers, however, would continue to attract three per cent GST.
The Council’s decision comes as a major relief for diamond processors and the entire value chain, including angadias, and helps overcome ambiguity in the tax structure, besides avoiding the possibility of mis-declaration and tax evasion.
Welcoming the decision, the newly elected Chairman of Gem & Jewellery Promotion Council (GJEPC) Mr. Pramod Agarwal said, “GJEPC on behalf of the G&J trade fraternity welcomes the announcement made by GST Council regarding reduction of GST rate on Diamonds & Precious Stones from 3% to 0.25%. This move will certainly support the SMEs of the sector and small players including brokers, agents, and traders to function smoothly without blockage of working capital. Looking at the six million plus jobs that this sector accounts for and the 43.2 billion dollar exports out of the country, this cut in GST rate will definitely help the industry to grow further. Given the high price of the products where around 80% – 95% of the content is imported component and more than 90% being exported , this will be a great boost to the Indian Gems and Jewellery industry. Reforms like these will help India to become global leader in Gems and Jewellery.”