MUMBAI: India’s trade ministry is seeking a cut in taxes for overseas diamond miners to boost trading in the world’s largest hub for polishing the gems, people with knowledge of the matter said.
The commerce department in a letter to the finance ministry has sought to scrap levies and instead introduce a presumptive tax of 0.25 percent on diamond mining companies to lure such firms to sell the stones in special notified zones, the people said, asking not to be identified as the plan isn’t public. Currently, miners refrain from sellingdiamonds in India as it attracts as much as 33 percent tax, at par with those paid by local companies on their income, according to the Gem & Jewellery export promotion council.Slashing taxes will bring India at par with international centers such as Antwerp and Israel, cut out middlemen and boost supply of rough diamonds in the nation where 14 out of every 15 of the gems are polished. It will reduce costs for small merchants who have to travel or pay traders to buy the stones from the overseas centers.
“This is our grudge and not the miners’ grudge as we want them to come and sell here,” said PraveenShankar Pandya, chairman of the exporters’ group. “More miners coming to sell in these zones will help companies get a direct supply to goods rather than going through the middlemen.”
