A delegation led by Gems and Jewellery Export Promotion Council (GJEPC) Chairman Shri Vipul Shah met Shri Saurabhbhai Patel, Minister of Finance in the government of the state of Gujarat to present issues of importance to the diamond trade.
The delegation consisted of Chandrakant Sanghavi, Regional Chairman, Gujarat, Ajesh Mehta, Co-Convenor, Diamond Panel Committee of GJEPC, Aagam Sanghavi, Chairman, IDI, Sabyasachi Ray, Executive Director, GJEPC Smt. Jilpa Sheth, Assistant Director, GJEPC and Pranay Narvekar, Pharos Beam Consultants.
Vipul Shah informed the minister that to turn India into a trading hub of rough diamonds and lessen the income tax assessment issues faced by the industry it is essential that India institute a turnover taxation regime coupled with consignment import of rough diamonds as is the case in countries like Belgium and Israel.
He mentioned that the introduction of Presumptive Taxation System will simplify the tax computing mechanism and avoid litigation resulting in the collection of higher levels of income tax.
Ray emphasized that the introduction of a turnover based taxation system would help in attracting foreign diamond mining companies to trade rough diamonds in India and boost the country as a diamond trading hub. “Members requested the introduction of a turnover tax with net profit calculated for computation of prevalent income tax at 2 percent of turnover for trading activity and 3 percent of turnover for manufacturing activity,” according to a statement from the GJEPC.
Chandrakant Sanghavi mentioned that coupled with that the consignment import of rough diamonds in diamond bourses in India should be introduced. Though the Foreign Trade Policy allows this, due to the absence of Custom Notification, free import and sale of rough diamonds on a consignment basis is not possible in India due to which the diamond manufacturers of Gujarat have to travel to Dubai, Belgium or Israel to purchase raw material and which incurs huge extra costs.
Members urged Saurabhbhai to declare designated areas in the diamond bourses as special notified zones where import and trading of rough diamonds will be allowed, thus helping mining companies to bring their rough supplies directly for trading in India.
Ajesh Mehta raised concerns about the availability of finance to the industry from banks.
The minister discussed the issues in detail and assured support for the trade and to take up the issues with the central government, especially with NirmalaSitaraman, the Minister of State for Commerce & Industry.