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Gujarat Diamond Industry Faces Octroi Tax
Mar 31, 2005 7:03 AM
By Ketan Tanna
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(Rapaport...March 31, 2005) Diamond traders and local authorities in the city of Vadodara, in the western India state of Gujarat, are at odds. The Vadodara Municipal Corporation asked 36 jewelers to submit details of the diamonds and precious stones purchased by them during the past three years so that an entry or octroi tax can be collected from them. Octroi is levied at varying rates by local authorities in cities across India on goods entering city limits.
The diamond industry has never had to pay octroi. Local jewelers say diamonds are exempt under city rules. Vadodara city authorities however, claim that diamonds and precious stones are non-classified items and not included in the scheduled list of the items exempted from octroi. This means that a 2.5 percent of octroi could be levied on diamonds.
According to a city official, given the high volume of diamonds and precious stones being traded in the city, an octroi tax would yield sizeable revenues to the local government.
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Tags:
Government, India
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