(IDEX Online) - The Indian government has announced a 3.5-percent cut in the Goods and Service Tax (GST) on work related to diamonds to 1.5 percent. The move is an attempt to shore up the ailing diamond industry.
According to the Business Standard, the cut is expected to release Rs 1,500 crore ($212 million) in blocked working capital into the pipeline.
The government made similar cuts for the precious stone trade where the GST rate has now dropped to 0.25 percent from 3 percent.
"The measures will provide impetus to the sector, help upscale manufacturing and augment exports of gems and jewelry from India," said Pramod Kumar Agrawal, Chairman, Gem and Jewellery Export Promotion Council (GJEPC), as reported by the Business Standard.
"The government has given a positive stimulus to the economy and the industry facing challenging times due to slump in global demand and also due to low domestic consumption."
Further good news for the industry came with the announcement that GST on jewelry exports had been cut to zero.