India Relaxes Tax on Jewelry-MakingRAPAPORT... Indias government has reduced the tax rate on diamond and jewelry manufacturing to 5% following an earlier announcement that it would charge industry members an 18% levy, the Gem & Jewellery Export Promotion Council (GJEPC) said Monday. The tax applies to the so-called making charge the amount of money it costs to produce jewelry pieces. It is part of Indias new goods-and-services tax (GST) system, which will go into effect on July 1. The GST Council made the decision to relax the rate at a meeting on Sunday following petitions by the GJEPC, the trade body said. The council also agreed to an exemption for re-imported polished diamonds that large exporters have sent abroad for laboratory testing. Under the GST regime, the government will tax rough diamonds and other rough precious and semi-precious stones at 0.25% a move that received criticism from the GJEPC, which claimed it would damage the nations cutting trade. Gold and polished diamonds will be subject to a 3% tax, a decision that got a more positive response from the trade because the rate was lower than the 5% some had feared. Jewelry sales have increased an estimated 20% to 25% since the June 3 announcement of the tax rates, as consumers are rushing to buy gold for the current wedding season before the GST regime takes effect, a spokesperson for the All India Gems & Jewellery Trade Federation explained India on Wednesday relaxed the rules for its tax on gold jewellery sales that was introduced earlier this year in an attempt to address concerns raised by the industry, the government said in a statement. Jewellers in the world's second biggest gold consumer went on strike for six weeks after the government imposed 1 percent excise duty on gold jewellery from March onwards. To address jewellers concerns the government formed a committee and accepted its recommendation. According to the new rules, jewellers with turnover up to 150 million rupees ($2.2 million) a year will be exempt from the excise duty, the statement said. Earlier, the exemption limit was for jewellers with turnover up to 120 million rupees. The government statement also said that in the first two years, government agencies will not audit jewellers that have turnover of less than 1 billion rupees PS. Good news