India hikes Goods and Services Tax on polished diamonds to 1.5%

India’s Goods and Services Tax Council, in its 47th meeting held on 28th and 29th June 2022, has come up with revisions in Goods and Services Tax (GST) rates for a series of products. With regards to polished diamonds, the GST has been increased from 0.25% to 1.5% (effective 18th July 2022), which the diamond sector has welcomed as it resolves their issue of Input Tax Credit (ITC) accumulation being faced on account of inverted duty under GST Regime. 
GJEPC, the apex body of gem and jewelry trade in India, to ward off the stress that the diamond sector was going through due to accumulation of the GST, through a series of representations, had been seeking redressal through enhancement of the rate of GST on polished diamonds in the front end. 
Colin Shah, Chairman, GJEPC said the apex body of gem and jewelry trade in India is thankful to the finance minister for rationalizing the GST rates on polished diamonds and giving relief with regard to the issue of ITC accumulation for the diamond sector, which reached approximately over Rs. 6 billion. The increase in GST rate on polished diamonds will not only stop further accumulation of ITC but help in release of blocked working capital and stimulate industry growth, he added.