India's Tax Break for Diamonds Stuck Abroad
July 14, 20
(IDEX Online) - India is allowing companies more time to have diamonds graded and certified abroad without having to pay duty, in response to coronavirus.
Polished diamonds are routinely sent to labs overseas, but have been subjected to delays because of the COVID-19 pandemic. They are normally subject to duty if they are out of the country for over three months.
India's Central Board of Indirect Taxes and Customs will now allow them an extra three duty-free months for parcels of diamonds which should have arrived back in the country between 1 February and 31 July, but were stuck abroad.
It means diamond factories will largely be spared the burden of having to pay Basic Customs Duty (BCD) and integrated goods and services tax (IGST) when the diamonds are re-imported.
Last week industry bodies urged the government to reduce the 7.5 per cent import duty on diamonds to 2.5 per cent, as it was when it was introduced in 2018.