Thursday, 9th June 2005 (3986 views)

Indian jewellers have received a boost following an announcement by the Finance Ministry that that the production and processing of goods will be exempted from a proposed ten per cent service tax.

The new ruling applies to the manufacturing of plain and studded gold jewellery and other precious metals as well as the cutting and polishing of diamonds and gemstones and will come into effect from June 16th.

In its budget for 2005-06, the Indian government proposed the taxation and this led to intensive meetings with leading industry leaders such as the Gems and Jewellery Export Promotion Council, according to the International Diamond Exchange.

The taxation would have been applicable to each stage of the manufacturing process that is outsourced, leading to a sharp increase in costs.

India's diamond and jewellery exports in the 2004-05 financial year exceeded official targets, rising to $15.677 billion (£8.8 billion). The government has said that its target for annual jewellery exports is $20 billion by 2007.

 

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