Government raises GST on cut and polished diamonds to 1.5%
The Goods and Services Tax Council has decided to raise the GST rate on cut and polished diamonds from 0.25% to 1.5% and the new rate will be implemented from July 18.
The GST Council held its 47th meeting from June 28 to 29 and addressed and revised the GST rates on a number of product categories, ET Bureau reported. The rise in GST rates on cut and polished diamonds has been widely welcomed by the Indian jewellery industry because it resolves the issue of input tax credit accumulation which was being faced by businesses due to the inverted duty structure.
The Gem and Jewellery Export Promotion Council had been calling for this rate adjustment. “We are thankful to honourable Finance Minister for rationalising the GST rates on cut and polished diamonds and giving relief with regard to the issue of ITC accumulation for the diamond sector,” said GJEPC chairman Colin Shah, the GJEPC reported on its website.
“It is estimated that approximately Rs 600+ crores of ITC accumulation is there as on date with the diamond industry,” said Shah. “The increase in GST rate on cut and polished diamonds will not only stop further accumulation of ITC but help in release of blocked working capital and stimulate industry growth. We would now earnestly urge the government to formalise a mechanism for the traders to receive the refund of the accumulated GST.”
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