Importers protest recent circular from Customs office on rough diamonds

A recent circular from the Customs office has put on hold the import of rough diamonds, rue industry officials. The circular was issued a fortnight earlier. It says importers must specify the origin, size, shape, type, colour, etc, of each such diamond in the bill of entry or shipping bill.

The Customs department has said the circular is a sequel to some recent incidents of suspected misdeclaration of value in import and export of rough diamonds.

Last year, India imported rough diamonds worth $19 billion. After value addition, export of cut and polished diamonds were $24 bn.

Importers say there is no import duty on roughs; only a 0.25 per cent Integrated Goods and Services Tax has to be paid, based on the declared value mentioned in the shipping bill. 

Colin Shah, vice-chairman of the Gem & Jewellery Export Promotion Council, said: “For 16 years, the declarations are based on information as stated in the foreign exporter’s shipping bill and invoices. The description is uniform for export made by exporters across countries. The details sought by Customs are not those available with any exporter and cannot, hence, be mentioned in the shipping bills/invoices." Rough diamonds, he says, are found naturally, with no homogeneity.

Dinesh Navadia, former president of the Surat Diamond Association, says: “Several consignments are now at risk of not being cleared. This means idling of production capacity, unemployment of thousands of workers, delay in execution of export orders and blockage of working capital. A million diamond cutter jobs are at stake.”

Shah said they had requested the central government to withdraw the circular.