DRI swoops down on diamond companies

As many as five diamond manufacturing companies in the diamond hub of Varachha and Katargam have come under the scanner of the Directorate of Revenue Intelligence (DRI) for evasion of customs duty. This follows a seizure of around 350 kg of synthetic diamond powder imported under the duty free replenishment scheme by a leading company in Dabholi.

The raid was conducted by the DRI following a tip-off regarding diversion of the synthetic diamond powder used as an input material in the manufacturing of medical equipments and devices for other purposes. The company owner allegedly used to earn huge profits on the synthetic diamond powder that was imported duty free under the replenishment scheme.

Official sources said there are some of other diamond manufacturing companies in Varachha and Katargam involved in evasion of customs duty in the garb of importing duty free synthetic diamond powder and diverting it to the market for earning huge profits.

The DRI has initiated a probe against such diamond manufacturing companies involved in the illegal practice.

Under the duty free replenishment certificate ( DFRC) scheme, import incentives are given to exporters for import of inputs used in the manufacturing of goods without payment of basic customs duty.

Earlier, the diamond companies were involved in the large-scale round-tripping of diamonds as there was no import duty on the polished diamonds. However, the union government introduced a two per cent import duty on the polished diamonds in January 2012, which is believed to have stopped the round-tripping in the industry.

http://articles.timesofindia.indiatimes.com/2013-05-26/surat/39537553_1_customs-duty-diamond-manufacturing-varachha-and-katargam