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Surat Traders Strike over New Tax

Jun 18, 2017 5:06 AM   By Rapaport News
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RAPAPORT...
Diamond traders in India observed a one-day shutdown on Saturday in opposition to a new tax on the industry, according to local reports.

Several thousands of traders and brokers joined the strike in Surat, a diamond-manufacturing hub in the state of Gujarat, following a call by a group set up to protest the levy, The Times of India reported Sunday. The goods and services tax (GST) would put smaller diamond companies under severe pressure, industry figures argued. However, the Gem & Jewellery Export Promotion Council (GJEPC) opposed the shutdown.

India’s government announced the new 3% tax on gold and polished diamonds earlier this month. Effective from July 1, it replaces the existing system under which goods were subject to a 1% excise duty and local value-added taxes of 1% or more. Rough diamonds, previously exempt from tax, will incur a 0.25% charge, while jewelry-manufacturing costs will be taxed at 5%.

“The GST will ruin small traders and manufacturers,” the report cited Lalit Thummar, leader of the diamond industry in Amreli, a city in Gujarat, as saying.

Jeram Kalasia, head of the group behind the strike, called on the GJEPC and the Surat Diamond Association to campaign for the diamond industry to be exempt from GST, claiming the tax would “make it difficult for small diamantaires,” according to the report.

While opposing the strike, the GJEPC argued strongly against the tax on rough diamonds and successfully petitioned the government to reduce a previously announced 18% levy on jewelry making to 5%.
Tags: Gem & Jewellery Export Promotion Council, GJEPC, goods and services tax, GST, Gujarat, India, Rapaport News, Surat, tax
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