The South Korean government, following years of negotiations with the Korea Diamond Exchange (KDE), has abolished the special 26% Individual Consumption Tax (ICT) on imports of loose polished diamonds exceding KRW 5,000,000 ($4,460), leaving in place only the simplified rate of 5% import tax and 10% VAT which already applied to all imports. KDE President Nam Chang-Soo said, "We hope that the abolition of the tax will have a very positive effect on diamond jewelry sales in South Korea."
The partial shutdown of the US government is likely to have had a negative impact on exports of small diamonds from India to the US, according to Colin Shah, vice chairman of the Gem & Jewellery Export Promotion Council (GJEPC). This comes as unwelcome news to an industry that is already experiencing sluggish performance, with The Economic Times citing an 8.5% decline in the value of polished exports in the first nine months of FY2018, sitting at to $22.41 billion.
While welcoming the Indian government's recent Increase of the import duty on jewelry from 15% to 20% as a way to strengthen the jewelry manufacturing sector, Chairman of the Gem & Jewellery Export Promotion Council (GJEPC) Pramod Kumar Agrawal said the hike on cut and polished diamonds and processed colored gemstones would negatively impact exports and trade of cut and polished diamonds.
In an effort to narrow the current account deficit (CAD), the Indian government on Wednesday increased the import duty on 19 'non-essential items' including polished diamonds, gemstones and jewelry, but excluded rough diamonds from the increase. The import duties on cut and polished diamonds, lab-grown diamonds and cut and polished colored gemstones increased from 5% to 7.5%.
China will cut import tariffs on nearly 1,500 consumer products as from July 1, including gold jewelry set with diamonds, as well as precious stones, in a bid to boost imports as part of efforts to open up its economy. A total of 18 tax items involving jewelry categories are included in the tariff reduction, with an average tariff rate drop of 68%.
The so-called "Carat Tax", the institutionalized tax regime which the Belgian federal government implemented for the Belgian diamond trade in tax year 2016, yielded significantly higher revenues in 2017 than expected, according to Belgian newspapers De Standaard and Gazet van Antwerpen. The special tax on diamonds delivered $84 million (€68.4 million, converted at average 90-day exchange rate) to the Treasury against forecasted earnings of $61.25 million (€50 million), and dwarfed last year's earnings of $62.7 million (€51.2 million), a nearly 34% increase in revenues.
The United Arab Emirates (UAE) Cabinet has announced that it is reversing the 5 percent value added tax (VAT) for investors in gold, diamond and precious metals at the wholesale level. Doing so will “contribute to stabilising the gold and diamond sector in the UAE as well as stimulating investment in this sector”, a statement said following the Cabinet decision. The move, which goes into effect immediately, is expected to ease the pressure on gold and diamond traders in the country. Retailers will continue to impose 5 percent on all jewelry transactions taking place at their shops.
The Indian government has raised import duty on cut and polished diamonds and coloured gemstones from 2.5% to 5% in the Union Budget 2018-19, and the country's diamond trade is not pleased. Announcing the 2018 budget, and in an attempt to protect the local industry Finance Minister Arun Jaitley doubled the import duty on cut and polished diamonds, coloured gemstones and lab-grown diamonds and also raised customs duty on imitation jewelry from 15 to 20 percent.
India's GST (Goods and Services Tax) Council met on January 18 slashed the tax rate on 54 services and 29 items, including polished diamonds. Diamond processors and jewellery exporters in the country Around 94 percent of the diamonds processed in the country would attract 0.25 per cent GST effective Friday, according to Business Standard, down from three percent, following the GST Council's decision. This adjustment, however, only applies to trade between Indian states.
The Gem & Jewellery Export Promotion Council has announced that Pramod Kumar Agarwal has been elected as Chairman and Colin Shah as Vice Chairman of GJEPC for the period from 2018 to 2020. Both have been working in the industry for a number of decades, and have held various positions of responsibility in GJEPC committees over the years. The new Chairman Pramod Kumar Agarwal said, “I am committed to developing a favorable environment for the gem & jewellery trade and business during my tenure.
Recent reports ranging from the Gem and Jewellery Export Promotion Council's (GJEPC) lobbying efforts to change the Goods & Services Tax (GST) for the diamond industry, to Indian manufacturing companies looking to set up cutting and polishing units in Russia and an estimated $158 million in couriered diamond parcels seized on suspicion of tax evasion have the Indian industry hot under the collar about the GST.
Speaking at the opening day of the Dubai Diamond Conference, at the Dubai Multi-Commodities Centre (DMCC), Peter Meeus, Chairman of Dubai Diamond Exchange (DDE) said the Value-Added Tax (VAT) set to be introduced in the UAE from next year could deal a crippling blow to Dubai's loose diamond trade. “The possible cost implications of a VAT introduction for UAE traders are huge,” Meeus said. “Winter is coming,” he added, "because in a business where profit margins are very thin, every quarter of a per cent is important to traders handling billions of dollars to decide where to ship." He furthe
According to The Economic Times, Indian diamond traders that participate in rough diamond auctions at Mumbai's Indian Diamond Trading Centre (IDTC) are complaining that taxation issues are reducing their activity to mere window shopping. "Diamantaires can see the rough diamonds they bid for at the IDTC, but the delivery doesn't happen locally .. despite their successful bids at Bharat Diamond Bourse", the newspaper writes.
India's recently-adopted goods & services tax (GST) of 3% on polished diamonds, 5% service tax and 0.25% on imported rough diamonds is making life challenging for the country's 50,000 small and medium diamond manufacturing units in Gujarat, employing up to 200,000 workers. The Economic Times, citing Praveen Shankar Pandya, chairman of the Gem & Jewellery Export Promotion Council (GJEPC), reports that due to increased compliance requirements and uncertainty over when they will get input credit refund, the viability of many of these small units is uncertain.
Indian diamond manufacturers, brokers and merchants in the manufacturing center in Surat have unanimously decided to shut the industry for a day on June 17, demanding exemption of the polished diamonds from the 3% Goods and Service Tax (GST), writes The Times of India (TOI). They have formed a committee to lead the protest against the GST council's decison to impose 3% GST on polished diamonds and 18% GST on diamond trading.
Much to the relief of the gold jewelry and diamond processing industry, the government has made some changes to the previously announced goods and services tax (GST) rate structure, slashing the applicable rate from 18% to 5% for certain categories of goods and services - and importantly, manufacturing - related to the gem and jewelry industry. The Council’s earlier decision of 18% was met with much discontent among jewelry manufacturers, who called it impractical and likely to cause immense job losses, as well as increasing the burden on the end consumer. The new tax kicks in from July 1.
The Indian government’s decision to impose a 0.25 per cent tax on rough diamond imports under the goods and services tax regime (GST) in order to ensure traceability of diamonds will hurt India’s competitiveness, according to diamond industry representatives. India’s Gem & Jewellery Export Promotion Council (GJEPC) criticized the government’s decision to tax rough diamond imports, claiming it will damage the nation’s manufacturing sector, and is urging the government to reconsider its decision.
According to a report by Martin Creamer in Mining Weekly Online, South Africa's Minerals Minister Mosebenzi Zwane has taken the seemingly odd decision to deny diamond mining company De Beers Consolidated Mines (DBCM) an exemption from a 5% levy on exports of rough diamonds to Botswana for aggregation.
"Martin Rapaport, chairman of the Rapaport Group, called on India to show reciprocity in its trade relationship with the United States," writes eponymous Rapaport News of their founder's “State of Diamond Industry” presentation at GJEPC's "Mines to Market" conference yesterday, marking 50 years of India’s Gem & Jewellery Export Promotion Council.
While it is early days for an already turbulent and unpredictable Trump administration, news that the White House has floated the idea of introducing a border tax on imports from Mexico is likely causing anxiety among retailers that rely on such imports.
Dubai has imposed a 5% import duty (from 0.36%) on gold and diamond jewelry as of January 2017, opening the debate on who will win or lose: India's exporters of said jewelry, or their domestic market purveyors and consumers; local manufacturers in Dubai, or their exporters of Indian gold and diamond items? The Economic Times frames the debate as follows: "Dubai has imposed a 5% import duty on gold and diamond jewellery, a move which is likely to hurt Indian exports at a time when demonetisation has hit business at home.
The Israel Diamond Exchange and Israel Diamond Manufacturers Association sent a letter to Israeli traders Diamond companies in Israel have been granted another two months to voluntarily disclose their assets, inventory and unreported income to the Tax Authority, writes Rapaport News. The trade organizations informed their members that firms have until the end of February to submit the full report of disclosures, as long as they declared their intention to do so by December 29.
Chinese shoppers are generally estimated to make approximately 30% of the world’s luxury purchases, and according to De Beers "Diamond Insight Report", Mainland Chinese demand for diamond jewelry doubled from a 7% global share in 2008 to 14% in 2015, making it the second largest consumer of diamond jewelry. Bain & Company estimated their share of the global luxury market decreased by one percentage point in 2016, due mainly to China’s economic growth slowdown, thriving deman
The Israel Diamond Exchange (IDE) has announced the Israeli Diamond Industry has finalized the terms of an agreement with the Israeli Tax Authority.
According to a report on the Israeli news site Hamodia, the country's tax authorities, following Israels commitments to the US and international organizations to apply a more stringent anti-money laundering policy, are targeting the Israeli diamond industry, generally considered the biggest offenders in this domain. Officials said that as of January 1st, the administration will go after tax fraud more agressively, implementing extended powers of investigation and enforcement.
Sierra Leone, the seventh largest diamond producing country in Africa by volume and eighth by value, increased its diamond production by 19% in the first half of 2016, according to Sierra Leone newspaper Awoko. Diamond production in the first six months of 2016 was 359,080 carats valued at $101.9 million, compared to 290,380 carats valued at $60 million produced in the first six months of 2015. The country ended up producting 500,000 carats in 2015, good for $154,253,129. The price per carat fell a full $40 compared to H1 2015, from $324 to $284.
According to Sputnik, "India will soon be enacting regulations that will end the role of intermediaries in the import of rough diamonds from Russia." Sources from the Indian Ministry of Commerce told Sputnik that new regulations will relax the restrictive taxation and customs procedure which Indians had to adhere to when importing rough diamonds.
By Chaim Even-Zohar. Reprinted from Diamond Intelligence Briefs by special arrangement. Click here to read the first article.
By Chaim Even-Zohar. Reprinted from Diamond Intelligence Briefs by special arrangement. Read the second part of this article here.
Diamond industry analyst Avi Krawitz presents his rundown of the India International Jewellery Show (IIJS) that took place last week in Mumbai. While noting that IIJS is currently a niche domestic show focusing on gold jewelry - which saw steady business, with jewelers expecting demand to rise along with gold's upward trend - Krawitz sensed optimism about the diamond market even though domestic diamond consumption has slowed recently. "India’s jewelry industry has some hurdles to climb before the diamond trade can grow domestic supply [and demand - DL].
Israel's tax authority will be cracking down on unreported capital, after receiving a list from French authorities of more than 8,000 Israeli customers who held bank accounts at the Swiss arm of HSBC. Israeli newspapers reported that diamond company owners were on the list, along with bank owners and directors, real estate moguls, retired military officers, public and private company heads, well-known lawyers, artists, soccer players, sports agents, a retired judge and a former prosecutor.
With the abolition of the 6.5% export duty on rough diamonds fast approaching on September 1, writes Kommersant Daily, the Russian diamond cutting industry is asking the government to provide large-scale support to withstand competition on international markets - in particular from Indian diamond manufacturers.
With a view to attracting diamantaires from other centres across the world to process their diamonds in India, the Gems and Jewellery Export Promotion Council (GJEPC) wants the central government to implement a 'job work' policy like that which is implemented in China, providing tax exemptions for importers and exporters of diamonds, and is preparing a draft policy to this end. The claim is that China's policy is the reason why despite labour being 20% cheaper in India, diamantaires from different parts of the world prefer sending their goods to China for processing.
When it comes to buying luxury goods, including diamond jewelry, Chinese shoppers prefer to buy abroad rather than at home for simple reasons: they are cheaper overseas and the likelihood of them being just a good imitation is close to zero. But Premier Xi Jinping’s government wants to create a consumer-driven economy, with shoppers buying at home. To achieve this aim, writes Avi Krawitz in Rapaport, the administration raised taxes on jewelry and watches bought from online overseas websites. Meanwhile, such items bought at home come with sharp tariffs attached.
India’s Ministry of Finance has formed a sub-committee to, "look into issues related to the Imposition of Central Excise duty on jewellery", which is the 1 percent excise duty recently imposed on the jewelry industry.
Surat’s diamond sector is feeling more upbeat following the end of the national jewelers' strike and rising demand from China and the United States for polished goods. After picking up in January-February, trade again plummeted in March due to the nationwide jewelers' strike over a proposed new tax on gold that served to put a dent in domestic demand for diamonds, The Business Standard reported. Traders believe that a rise in domestic and international demand as well as the effect of the end of the strike will create a rise in business levels.
Reports from multiple sources are starting to detail the murky structures hiding the tremendous wealth accumulated by certain players in the diamond and gold trade that emerged through last week's release of the Panama Papers.
The Indian Express has written that one of the largest diamond trading firms in the world, Antwerp-based Rosy Blue, has been linked to at least 24 offshore companies in the Panama Papers, "and these are shown to have been registered in the tax havens of British Virgin Islands, Seychelles, Anguilla and Mauritius ... Most companies," the paper writes, "were registered by Harshad Ramniklal Mehta, with a capital of $50,000 each, between 2004 and 2008.
The Indian government on 30 March exempted from customs duty cut and polished diamonds imported by HRD Antwerp's Mumbai Diamond Institute for grading and re-export, taking the number of such entities enjoying the facility to four. In July last year, the Central Board of Excise and Customs (CBEC) had exempted from customs duties cut and polished diamonds imported for grading or certification and re-export by three laboratories and agencies.
The jewelers strike in India against the 1% excise duty on non-silver jewelery has entered its fourth week, despite claims from major trade bodies last week that they accepted the government’s assurance that there would be no raids and seizure of goods with the imposition of the tax, effectively ending the strike.