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Surat Diamond Industry to be Exempt from VAT
Mar 30, 2006 6:48 AM
By Jeanette Goldman
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(Rapaport...March 30, 2006) India’s state government has decided to exempt Surat’s diamond and zari industries from the Value Added Tax (VAT) that was due to come into effect on April 1.
Addressing the State Assembly on March 29, state finance minister, Suarabh Patel, said that in addition to the diamond and zari industries, the government will also exempt textiles, tobacco, and sugar from VAT for a period of one year. However, imported products would have to bear the VAT, said Patel.
The government had earlier proposed a 1 percent tax on the diamond industry and 4 percent tax on the zari industry, but as a result of of appeals from trade and industry associations, the ministry decided to exempt the two sectors from paying VAT.
Surat’s Diamond Industry Association president, Muljibhai Dhamelia, welcomed the exemption. He noted the industry’s concern that implementing one percent VAT would invite harassment from sales tax officers. ‘‘The uncertainty over one percent VAT on the diamond industry is now over with the announcement to exempt it,” said Dhamelia.
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Tags:
Government, India, Surat
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