Stamp duty forces diamond traders to shift base to Surat

The diamond traders of Mumbai, who annually import stones worth Rs 45,000 crore through the international airport, are considering shifting base to Surat to avoid paying Rs 45 crore annually to the Maharashtra government as stamp duty.

The chairman of the Gems and Jewellery Export Promotion Council (GJEPC) Bakul Mehta said: " with the enforcement of stamp duty there had been a 168 per cent spurt in diamonds imports into Surat.

We have made a representation to the state government and hope the matter will be resolved through the intervention of chief minister Vilasrao Deshmukh."

Mehta points out that rough diamonds are imported, are processed and re-exported. Stamp duty of 0.1 per cent is being levied on diamonds gold silver and electronic items, imported through the air route from this fiscal, after government amended the stamp duty act redefining airports as 'ports', he added.

"Another issue pertains to double taxation. Even diamonds that are imported purely for certification exercise and those exported for exhibitions, are also required to pay the stamp duty at the time of bill of entry when brought back" Mehta said.

K S vatsa, secretary (relief and rehabilitation as well as stamp duty) said: " The delays in collection of stamp duty by the two authorised banks at the airport resulted in delaying the transactions. Under a new system, we have worked out that all banks selling stamp paper will be authorised to collect the stamp duty accruing from such imports through the airport."

He ruled out the possibility of withdrawal of the levy, adding: "We expect to generate Rs 100 crore in stamp duty from imports of gems and jewellery, gold, silver and electronic items that are imported through the air route into Maharashtra."

Advisor to the GJEPC VSA Sury says: "The gems and jewellery trade will find it difficult to bear the burden of Rs 44 to Rs 45 crore in stamp duty annually.

"Effectively, the duty amounts to a levy on exports. The Union government has repeatedly been stating that we should not export our taxes. Why is this being contradicted by the state government then?"