The Dubai Diamond Conference, organised by the Dubai Diamond Exchange (DDE), an initiative of the Dubai Multi Commodities Centre (DMCC), will hold an in-depth discussion titled, The introduction of Goods and Services Tax (GST) on wholesale diamond trading on Day 2 of the event on October 17.
DDE Chairman Peter Meeus and former De Beers executive Tim Dabson will moderate the discussion on a subject that has caused widespread industry debate in India and the UAE.
Leading experts from the diamond and jewellery sectors in India and Dubai will provide insights for the benefit of attendees at the third edition of the biennial conference. The panel will look at the reasons for the tax being imposed, and if it is aimed at reforming the diamond and jewellery trade in India in a similar vein to the demonetisation programme that was introduced last year. Panellists will also be asked if the Indian government has an overall master-plan for industry reform, and what the likely effects might be going forward of the tax for the UAE and India.
The panellists will be Super Gems Group Chairman Rajesh Mehta, Chairman,Dubai Gold and Jewellery Group Chairman Tawhid Abdullah, Chairman, Pure Gold Jewellers CEO Karim Merchant, Gem & Jewellery Export Promotion Council (GJEPC) Chairman Praveenshankar Pandya, Russian Ministry of Finance Head of Corporate Governance in Precious Metals and Precious Stones Alexander Pshenichnikov, Joyalukkas Group Head of Corporate Finance Thomas Scaria, and 7Cs Group Chairman Rihen Mehta.
As of 1 July this year, shoppers in India have been paying 3 percent GST which was imposed in a bid to make tax on the gold simpler, but it means that, for the time being, gold jewellery is less expensive in Dubai. The Indian gems and jewellery industry was originally unhappy with the GST rate, but relieved that it was not higher. GCC countries have agreed to impose 5 percent VAT on non-essential luxury goods from January 2018.
Pandya says the GJEPC is observing the results of the introduction of the new tax rate. "We held considerable discussions with government officials during the consultation process. Small businesses are being heavily impacted by compliance issues and we are hoping the government will move to reduce these demands."
To further support the agenda, the DMCC also published its latest report today titled New consumption taxes in UAE and India — How will they affect the economic landscape?, as part of its Connected Thinking thought leadership programme. What will be the impact for consumers, businesses and trade when UAE implements VAT at 5 percent on January 1, 2018? The introduction of a goods and services tax (GST) in India on July 1 this year prompted similar questions. Will these taxes mean that consumption will take a big hit?
“In my view, it is clear that for the UAE to sustain its position in the global diamond trade, polished and rough diamonds would need to be exempted and have a zero tariff as is the case in other wholesale centres. Dubai is also a young diamond marketplace and therefore needs to provide incentives and services that not only match but go over and beyond those of other top diamond hubs to continue to attract the trade to the region”, concluded Meeus.
The Dubai Diamond Conference takes place in Dubai's Almas Tower, the home of the DDE, on October 16 and 17.