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GJEPC: Raid Shows Problem with Tax Policy
Jan 9, 2018 4:00 AM
By Leah Meirovich
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RAPAPORT... India’s Gem & Jewellery Export Promotion Council (GJEPC)
has called for clearer tax rules, an official said, after authorities raided diamond couriers who
were transporting finished goods back to their owners in Mumbai on Saturday.
The preventive wing of the excise division, a branch of
the Goods and Services Tax (GST) department, carried out the raid. Officials
from GST were not fully informed of how the trade works, GJEPC
chief executive director Sabyasachi Ray said Monday.
Tax should not have been levied on the goods, according to Ray, since they were primarily polished diamonds — imported and outsourced to Surat for work — that had been on their way back to their buyers in Mumbai when the raid occurred. Authorities have returned most of the confiscated diamonds, and the rest
are set to be released shortly, Ray added.
The GJEPC has asked the Indian government to institute new
rules on GST for diamonds, similar to those in Belgium, where there is no tax on transactions between registered diamond traders.
In India, the tax applies to imported diamonds, but not exported ones. As such, when diamond traders import stones for manufacturing, they must pay the import levy and then claim a refund when they export the polished diamonds — a process Ray called “futile,” since, he said, 95% of the diamonds in the Indian market are destined for export after cutting and polishing.
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Tags:
Belgium, diamond couriers, Gem & Jewellery Export Promotion Council, GJEPC, GST, India, Leah Meirovich, mumbai, raid, Rapaport News, Sabyasachi Ray, Surat
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