Praveenshankar Pandya, Chairman of GJEPC, said that diamonds are the key raw materials for gem and jewellery exports business which are kept out of the purview of taxes even in various Asian countries which are globally competitive. In this sense and according to the Prime Minister’s directives to make gems & jewellery industry in India a global diamond hub, he requested the authorities not to get entangled in procedures for refund and focus instead on popularizing Indian jewellery across the world.
Pandya added that 95% of the gem industry's output is exported and its representatives are under constant stress from other competitive economies, so an upfront levy of GST on rough imports would invariably cause a major setback to India’s trade significance in the global markets.
Owing to the thin margins in the segment, each businesses will have to re-evaluate the viability of conducting the cutting and polishing activity in India, in light of the extent of strain GST would bring on its working capital, and, eventually, this may lead to significant volume of flight of capital and employment to other jurisdictions, he warns.
Pandya requested the Indian Government to reconsider its decision of taxing rough diamond imports under GST, owing to such severe repercussions. He however welcomed the Government’s move of keeping GST rate of 3% on gold and jewellery and this is in line with our representations and recommendations.
Pandya urged the government to take several steps, which include nil-rated transactions under Diamond Dollar Accounts (DDA), exemption for local rough and polished diamond transactions for the purpose of exports as well as import of gold, platinum and silver for the manufacturing and subsequent export sales of jewellery.
Aruna Gaitonde, Editor-in-Chief of Asian Bureau, Rough & Polished