Indian Gems Council Wants VAT-Free Diamonds
February 09, 03
The Indian Gems & Jewellery Export Promotion Council (GJEPC) is asking for a complete exemption from VAT (value added tax) on loose diamonds in the forthcoming 2003-04 budget.
Sanjay Kothari, GJEPC chairman said diamonds were processed and traded mainly for exports and were therefore an immediate item of jewelry. "With 99 percent of diamonds exported and the rest sold as jewelry, the existing VAT on jewelry and VAT on loose diamonds amounts to double taxation" Kothari said.
Abolition of sales tax on diamonds in Maharashtra is also being sought. Other states like West Bengal, Gujarat and Rajasthan have no sales tax on loose diamonds.
India currently has a global market share of 60 percent of diamonds by value, 85 percent in volume and 92 percent in terms of pieces. Kothari feels the exemption would help India to become the world's largest trading center.