Diamond and zari flare up on VAT imposition

03 Mar '06

1 min read

VAT in Gujarat has given Surat businessmen an opportunity to come together.

The group of businessmen plans to meet State Finance Minister this week to request him to give reconsideration to the decision of imposing VAT on diamond and zari.

The diamond association intimidated that the entire diamond industry would remain close if the Government did not reconsider its decision on VAT in the State.

VAT imposition would force diamond industry to pay one percent tax, while zari manufacturers have to pay four percent VAT.

Earlier, the diamond industry supposed to deal with raw diamonds for exports only, and therefore the diamonds were not under any tax burden apart from income tax.

98 percent of the diamonds are being exported and the Government is earning huge amount of foreign exchange and income tax, said Southern Gujarat Chamber of Commerce vice president Pravin Nanavati.

Exporters feel that bringing diamond industry under VAT will only affect this scintillating industry, Gems Export Promotion Council Convenor Chandrakanth Singhvi said.

Diamond and zari are two major industries in Surat that will have to pay VAT as per the new tax system introduced in the State.

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