New Delhi: The government is likely to come up with a benign tax regime for the diamond sector in special notified zone (SNZ) with a view to help India become a hub of international trading of the precious stone. Although 90 per cent of the global diamonds are polished in India, they go back to countries like Belgium as there are no trading facilities within the country.
The gems and jewellery industry has suggested that the turnover tax on diamond trade in the special notified zone should not be more than 0.25 per cent and must be internationally competitive.
"The proposal was submitted to the Finance Ministry for its consideration in the Budget for 2016-17," sources said adding the move could help in making the tax regime competitive and boost the depressed diamond industry.
A special notified zone has been set up in Mumbai to give access of trading facility to Indian traders. An industry expert said that to enable trading from the zone and attract foreign companies, taxation regime should be simplified and competitive. The SNZ was set up with a view to facilitating imports and trading of rough diamonds.
The zone would also give the diamond industry a strong competitive advantage against other trading centres like Antwerp, Dubai, by saving time as well as foreign exchange spent on travel to these trading centres or establish offices there. It will also ensure steady supply of rough diamonds in the country.
According to the data of the Gems and Jewellery Export Promotion Council, exports of cut and polished diamonds fell to USD 14.78 billion in April-December 2015 from USD 17.32 billion in the same period last year. The country's overall exports too are in the negative zone since December 2014.
