GJEPC urges GST Council not to levy duty on small and medium diamond processing units

Mumbai, Apr 10 (KNN) The small and medium sized diamond jewellers, who are into the business of diamond processing, should be exempted from levies of duty under Goods & Services Tax (GST), Gems and Jewellery Export Promotion Council (GJEPC) has demanded.

GJEPC Chairman Praveen Shankar Pandya last week met representatives of the GST Council urging them not to levy duty on small jewellers.

He said, “Thousands of small and medium size units, with an estimated 100,000 work force, primarily in Gujarat, currently purchase (rough) diamonds from sightholders (authorised agents) of large global miners like De Beers, Rio Tinto and Alrosa, to process these. After processing, they sell these to large processors.”

“Thousands of collection centres, therefore, are involved in the diamond business — after accumulating processed diamonds from small processors, they supply directly to exporters or large jewellery manufacturers. Largely spread in Gujarat, these small units currently execute their business duty-free. In our meeting with representatives of the GST Council, we have urged them to exempt these small units from duty levy,” said Pandya.

The gems and jewellery export has shown a decline from a record USD 43 billion in 2013-14 to USD 31 bn in FY16.

GJEPC said it is estimating that the exports will jump to USD 41 bn in FY17 on recovery in global demand, especially in America, consumer of nearly 40 per cent of precious ornaments globally made.

“Currently, gems and jewellery manufactured for export attract no levies; that for domestic sales attract around two per cent cumulatively (one per cent of value added tax and one per cent of excise duty). We have requested the government to continue with the same duty level in GST. A final decision is expected soon, perhaps in the next meeting of the GST Council. The officials wanted to know the complexity of the diamond processing business, of which we apprised them,” said Pandya.