Tuesday, 28th February 2006 (4190 views)

The commerce ministry in India is proposing to rationalise the country's existing tax structure by introducing a turnover-based system.

Such a system, which would simplify tax calculation, currently exists in gems and jewellery centres such as Belgium and Israel.

Bakul Mehta of the Gems and Jewellery Export Promotion Council (GJEPC) welcomed the proposal.

"This will bring India on par with prevailing global practices," he said.

The move would benefit those companies whose income percentage is more than the tax rate. However, traders with an income percentage of less than the tax rate will be penalised under the system.

MP Jewellers' Chandrakanta Roychowdhury said that the taxes would hinder the export process because time-consuming assessments would need to be carried out.

"Currently assessment is often done by those not familiar with the gold and diamond industry," he asserted. "The proposed tax will create additional burden on the system."

Gitanjali Gems director Mehul Choksi said: "There is a proposal to impose a tax rate so that the net effect will be around 0.7 per cent of total turnover."

 

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