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India Relaxes Tax on Jewelry-Making
Jun 13, 2017 10:32 AM
By Rapaport News
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RAPAPORT... India’s government has reduced the tax rate on diamond and
jewelry manufacturing to 5% following an earlier announcement that it would charge
industry members an 18% levy, the Gem & Jewellery Export Promotion Council
(GJEPC) said Monday.
The tax applies to the so-called “making charge” — the
amount of money it costs to produce jewelry pieces. It is part of India’s new
goods-and-services tax (GST) system, which will go into effect on July 1.
The GST Council made the decision to relax the rate at a
meeting on Sunday following petitions by the GJEPC, the trade body said. The
council also agreed to an exemption for re-imported polished diamonds that large
exporters have sent abroad for laboratory testing.
Under the GST regime, the government will tax rough diamonds
and other rough precious and semi-precious stones at 0.25% — a move that
received criticism from the GJEPC, which claimed it would damage the nation’s
cutting trade. Gold and polished diamonds will be subject to a 3% tax, a
decision that got a more positive response from the trade because the rate was
lower than the 5% some had feared.
Jewelry sales have increased an estimated 20% to 25% since
the June 3 announcement of the tax rates, as consumers are rushing to buy gold
for the current wedding season before the GST regime takes effect, a
spokesperson for the All India Gems & Jewellery Trade Federation explained.
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Tags:
finance, Gem & Jewellery Export Promotion Council, GJEPC, goods and services tax, GST, India, Jewelry, Rapaport News, tax
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