Is GST on diamond processing an unintended gift to China?

5% tax on job work to make smaller stones costlier; two-third local units may shift base to China

Over two-thirds of the diamond processing business in India could shift to competing countries, primarily China, due to the 5 per cent goods and services tax (GST) levied on small rough diamonds meant for domestic movement.
 
The Gems and Jewellery Export Promotion Council (GJEPC) reckons India’s rough diamond imports at 153.31 million carats worth $17.08 billion in 2016-17. Rough diamond imports grew 10.77 per cent by volume during 2016-17. Around 85 per cent of rough diamonds mined in the world are processed in India. Almost all miners like Alrosa, De Beers and Rio Tinto increasingly focus on Indian processors.