GJEPC Webinar Analyses GST Rate Change On Cut & Polished Diamonds

With a view to providing the industry with a more detailed background of the impact of the recent decision made by the GST Council, GJEPC organised a webinar based on the topic ‘GST Rate Change on Diamonds – A Background Analysis and Impact Assessment’ on 15th July.

Heeding the long-standing demand of the diamond segment, the GST Council, at its 47th meeting, took the favourable decision of increasing the GST rate on cut and polished diamonds (CPDs) from 0.25% to 1.5%, effective 18th July 2022, aimed at eradicating the issue of Input Tax Credit (ITC) accumulation.   

The webinar moderator Ajesh Mehta, Convener, Banking, Insurance & Taxation Sub-committee, GJEPC, provided a brief background on the issue and held a discussion with Jilpa Sheth, Projects and Business Management Consultant, Karmanya, on aspects such as GST challenges qua ITC since inception, justification and relevancy of initial GST rate reduction of diamonds (from 3% to 0.25%), explanation of why its resolution has taken so long, etc.

Advocate Supreme Kothari made a detailed presentation providing a more technical and legal explanation of the issue, and the reason why eventually a rate increase was suggested. Kothari also provided his views on the impact of rate change on CPDs and explained why the current rate bracket is the most ideal for the diamond sector.

Nirav Jogani, Director, RSM Astute International Pvt. Ltd., analysed the impact of the rate change on different participants in the value chain like importers, rough traders, manufacturers, polished traders and exporters etc. as also discussed about impact of the rate change on various prevalent transaction structures.

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