Diamond exporters will be allowed to ship goods out of India for trade shows or consignment without paying goods and services (GST) tax, the government has announced.
The revision rules that these items don’t constitute “supply,” Indian authorities said during the week of the 19th following several meetings with the Gem and Jewellery Export Promotion Council (GJEPC). Therefore, members of the trade have a six-month period in which to reimport the goods without incurring tax.
However, items fully or partially sold abroad during the half-year window will constitute “supply” under the GST rules. The exporter will then need to pay tax on the quantity of the shipment that has been sold. Additionally, any goods not returned within the allotted time frame will be charged after the sixth month, the government noted. The announcement did not deal with whether reimporters must pay customs duty.
The GST tax, which was established in July 2017, increased the rate for gold, diamonds and polished gemstones to 3%, and added a new tax of 0.25% for rough diamonds and other rough gemstones.
“This will further boost promotional activities globally,” said GJEPC chairman Pramod Agrawal. “The move will definitely provide respite to our member exporters.”
