Diamonds have always been a symbol of luxury and status. The sparkling gems are often associated with engagement rings, but they are also used in other jewelry items such as necklaces, earrings, and bracelets. However, when it comes to GST rates and HSN code for diamonds, things can get a bit confusing. In this article, we will delve into the world of diamonds and break down the complex tax structure surrounding them.
Before we dive into GST rates and HSN code for diamonds, it's important to understand what HSN code 7102 represents. HSN code 7102 is used to classify diamonds, whether they are rough or polished. It is a part of the Harmonized System of Nomenclature (HSN) and is used to identify every product in international trade.
GST or Goods and Services Tax is a tax levied on the supply of goods and services. In India, diamonds are taxed at a rate of 3%. This includes both rough and polished diamonds. However, there is an exception to this rule. If the diamond is purchased from an unregistered dealer, then the GST rate increases to 5%.
HSN code 7102 is used to classify diamonds. However, it is important to note that diamonds are further classified into different sub-categories based on their quality. The sub-categories are listed below:
1. Diamonds of a quality that is not good enough for industrial use (HSN code 7102.10.00)
2. Other unworked diamonds (HSN code 7102.21.00)
3. Unworked diamonds sorted or unsorted (HSN code 7102.31.00)
4. Unworked diamonds, temporarily strung for convenience of transport (HSN code 7102.39.00)
5. Worked diamonds, not mounted or set (HSN code 7102.41.00)
6. Worked diamonds, mounted or set (HSN code 7102.42.00)
7. Other diamonds (HSN code 7102.99.00)
The HSN code you use to classify your diamonds will depend on their quality and state of work.
In conclusion, diamonds are taxed at a rate of 3% in India, and they are classified using HSN code 7102. The HSN code is further broken down into sub-categories based on the quality and state of work of the diamonds. It's important to ensure that you use the correct HSN code to avoid any confusion or tax-related issues. We hope this article has given you a better understanding of the world of diamonds and GST rates and HSN code for diamonds.
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