India to follow in footsteps of Belgium and Israel

The gem and jewellery export promotion council has urged the central government for introduction of turnover tax for gem and jewellery sector in the country on the lines of countries like Belgium, Thailand and Israel, according to agency sources. The council`s chairman, Bakul R Mehta, said that the turnover tax will not only help in simplifying the process of tax imposition on the diamond trade but will also help the industry to grow in the country.

He pointed out that though the country currently accounts for 80% of the total diamond production in the world, the figure was as low as 55% in terms of value. He said that the tax is likely to generate economic buoyancy in the field of diamond business of the country. Moreover, it would encourage the foreign traders to open their shops in the country and thus give a boost to the diamond industry, he added.

Talking about the recent decision of the Government of China to reduce VAT from the prevailing rate of 17% to 4% on finished and zero per cent on rough diamonds, he asserted that the Indian diamond merchants will not be affected for the simple reason that VAT prevailing in India on both finished and rough diamonds was merely 1%. This was still lower than the revised VAT in China.