China reduces VAT on finished and rough diamond

Mumbai, July 14 (UNI) With the recent drastic cut of value added tax (VAT) on both polished and rough diamond, the neighbouring country China is quite hopeful of getting a boost in the diamond trade in the country.

Effective from July one, the Shanghai Diamond Exchange has reduced the VAT on diamond from 17 per cent to zero per cent on rough diamond, and four per cent on finished diamond.

Addressing a seminar on 'New China diamond policy - Golden opportunity to enter China jewellery market' here last evening, China council for promotion of international trade (Panyun branch) chairman Li Zhiwei said, ''Currently, jewellery industry in China is in a development mode which is clear from the fact that the jewellery industry in the country reached USD 5.49 billion, thus, registering a growth of 23 per cent, as compared to the previous year.'' If the present trend continues, there is no wonder if sales of jewellery in China reaches the 180 billion mark by 2010, he added.

On the scenario prevailing in a small province Guangzhou in South China, their Foreign Trade and Economic Cooperation of Guangzhou municipality Deputy Director General Gao Yaozong said Panyu Guangzhou has emerged as a mature retailing market, what with the fact that the city witnessed a total export of USD 1.6 billion in 2005, which accounts for 50 per cent of that of entire China.

On the occasion, Gem and Jewellery Export Promotion Council Chariman Bakul R Mehta said, ''Despite the fact that seven per cent of our total exports go to China, it was merely half per cent in the gem and jewellery sector.'' Encouraged by the reduction of VAT on diamond by the Chinese government, the council is planning to take a delegation to China next month, Mr Mehta added.

UNI KKD GK AW1442