On 29th July, the Economic Times reported that customs authorities think traders are siphoning off money through overseas offices by sending “spurious” rough diamonds, i.e. by sending worthless quartz masquerading as rough, uncut diamonds. In May, the authorities tightened export control procedures and required importers to specify the origin (country/mine) of the roughs, size, shape, type, colour and other relevant details, which may allow the Customs Department to assess the value of incoming packets – and, by doing so, it effectively ended the decades-old practice of importing roughs into the country by merely declaring packets as ‘rough diamonds’. However, it is said that many in the industry feel, the new set of declarations would gradually reduce import of roughs into the country – eventually hurting the thriving diamond cutting and polishing industry. The article notes that, over the past many years, several diamond traders have opened offices in tax-friendly jurisdictions such as Dubai, Singapore, Tel Aviv and Antwerp to “further their business interests”, and it is said that these offices, according to customs department, can act as conduits to siphon off money overseas.
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