|With the implementation of the new Goods and Services Tax (GST) in India as of July 1st, there is now a 3 percent GST on polished diamonds and 0.25 percent on rough diamonds. However, according to a report by The Times of India (TOI), the category of rough diamonds has been further differentiated into "sorted" and "unsorted" rough diamonds, with the "unsorted" rough diamonds subject to a much greater GST of 3 percent.
A senior official of India's Gem and Jewellery Export Promotion Council (GJEPC) reportedly commented that this high GST rate for unsorted rough will be a disaster for the industry, and create a major issue for the trade, advising that "...the government has to rectify the mistake, otherwise the entire trade will have to suffer its consequences."
Surat Diamond Association (SDA) President Dinesh Navadia says, "As the GST regime will come into effect from July 1, it is going to be a big disaster for the diamond industry in Surat. The industry will not be able to survive due to the differential GST rates on rough diamonds. Over 60 per cent of the diamond imported in the country are unsorted," added Navadia, as quoted by TOI. According to industry sources referenced by the news source, the rough diamonds sold by the leading diamond mining companies are sorted diamonds, while the industrial, near gems and gem quality diamonds imported directly by the small and medium diamantaires and traders from Dubai, Antwerp and South Africa are unsorted ones. Consequently, the burden of the higher GST rate of 3 percent will be mainly on the small and medium diamantaires.