GST Council, in its 47th meeting held on 28th and 29th June 2022, has come up with revisions in GST rates for a series of products. With regards cut & polished diamonds, the GST has been increased from 0.25% to 1.5% (effective 18th July 2022), which the diamond sector has welcomed as it resolves their issue of input tax credit (ITC NSE 1.74 %) accumulation being faced on account of inverted duty under GST regime.
Vide Notification No. 7/2018- Integrated tax (Rate) dated 25th January 2018, the GST rate on cut and polished diamonds was reduced from 3% to 0.25%, whereas the gem and jewellery industry continued to incur GST between 1.5% (job work charges) to 18% (like grading and certification charges, bank charges ) on procurement of input services as also certain inputs/ capital goods. Absence of the facility to claim refund of such input tax credit accumulated on account of input services under Section 54 ..
Gem and Jewellery Export Promotion Council (GJEPC), the apex body of gem and jewellery trade in India, through a series of representations, had been seeking GST increase on cut & polished diamonds to 1.5%, GST decrease on grading and certification (GCS) to 1.5%, refund of accumulated ITC, etc.
Colin Shah, chairman, GJEPC said, “We are thankful to Hon’ble Finance Minister for rationalizing the GST rates on cut & Polished diamonds and giving relief with regard to the issue of ITC accumulation for the diamond sector. It is estimated that approximately Rs 600 crores of ITC accumulation is there as on date with the Diamond Industry. The increase in GST rate on cut & polished diamonds will not only stop further accumulation of ITC but release blocked working capital and stimulate in ..
Source Name:-Economic Times