In order to avoid the risk of various taxation under the GST regime, diamond jewellers are seeking exemption from levies on diamond processing.
“Thousands of small and medium size units, with an estimated 100,000 work force, primarily in Gujarat, currently purchase (rough) diamonds from sight-holders (authorized agents) of large global miners like De Beers, Rio Tinto and Alrosa, to process these. After processing, they sell these to large processors. Thousands of collection centres, therefore, are involved in the diamond business — after accumulating processed diamonds from small processors, they supply directly to exporters or large jewellery manufacturers. Largely spread in Gujarat, these small units currently execute their business duty-free. In our meeting with representatives of the GST Council, we have urged them to exempt these small units from duty levy,” said Praveen Shankar Pandya, chairman, Gems and Jewellery Export Promotion Council (GJEPC).
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The statement came from Pandya after he had a detailed meeting with the GST council representatives on Friday.
As per the record, gems and jewellery export went through a downfall of $31 bn in FY16 from a record of $43 billion in 2013-14. GJEPC expects the recovery on the ground of global demand, especially in the US. The small units in Gujarat and Maharastra are fearing of having multiple levies on the same good for either rough or polished diamonds. This move could make them un-competitive in global markets.
“Currently, gems and jewellery manufactured for export attract no levies; that for domestic sales attract around two per cent cumulatively (one per cent of value added tax and one per cent of excise duty). We have requested the government to continue with the same duty level in GST. A final decision is expected soon, perhaps in the next meeting of the GST Council. The officials wanted to know the complexity of the diamond processing business, of which we apprised them,” said Pandya.
