No VAT for Gujarat diamond sector

A wave of celebrations runs throughout Surat�s diamond industry since Government exempts it from Tax. The Gujarat state government has decided to exempt the diamond and zari sectors from paying Value Added Tax (VAT), which comes into effect from April 1, 2006 onwards according to reports in The Times of India. Gujarat had earlier proposed a 1% tax on the diamond industry.

The state finance minister Saurabh Patel told the state assembly that in the interest of the traders, the government will also exempt textiles, tobacco and sugar from VAT for a period of one year. Imported products, however, will have to bear VAT, Patel added. �The uncertainty over one per cent VAT on the diamond industry is now over with the announcement to exempt it,� said Surat Diamond Industry Association preside

Muljibhai Dhamelia. He noted that the industry was concerned that implementing VAT would invite harassment from sales tax officers. �But now there is nothing to worry about,� Dhamelia added.