The Goods and Services Tax (GST) was introduced in India with the promise of creating a simplified, unified, and transparent tax system. However, as time has passed, certain decisions made by the GST Council, particularly regarding the taxation of luxury items such as diamonds, precious stones, and gold, have sparked serious concerns. These decisions seem to disproportionately favor the wealthy, raising doubts about the motivations behind them. The recent extravagant wedding of the son of a super-rich business tycoon, where multi-crore diamond jewelry was flaunted by a select few, only underscores the growing divide between the ultra-rich and the rest of the country. Such displays of wealth serve as a stark reminder of the widening gap between the rich and the rest of the population. The common and middle-income public of India is left wondering: are we living in two different worlds?
The slogan “Diamonds are forever” seems to apply to only a select few, making it clear that diamonds are indeed not for everyone. This raises a fundamental question: who was truly behind the decision to reduce the GST on diamonds? Was the GST Council acting in the interest of the entire nation, or was it influenced by powerful business lobbies aiming to protect their profits?
Moreover, the secrecy surrounding the GST Council meetings—conducted behind closed doors—raises questions about the transparency of a process that impacts every citizen and business in the nation. Do the GST Council’s decisions truly serve the interests of the nation or merely cater to the demands of influential business houses?
The Questionable Reduction in GST on Diamonds
One of the most contentious decisions by the GST Council was the reduction of the GST rate on diamonds from 3% to an extraordinarily low 0.25%. It was claimed that this change, made during the 37th GST Council Meeting on September 20, 2019, in Goa, was introduced with the aim of streamlining taxation and boosting the competitiveness of India’s diamond industry. However, this decision has led to substantial revenue losses for the nation, raising a critical question: why was such a significant tax cut granted to an industry that primarily benefits the ultra-wealthy?
The 0.25% GST was originally intended to apply only to the cutting and polishing services in the diamond industry, with the rationale of maintaining an audit trail for these activities. It was never meant to apply to the sale of the final product—diamonds—in the open market, where the GST rate remained at 3%. However, in a surprising move during the 2019 GST Council meeting in Goa, the GST on diamonds was lowered from 3% to 0.25%, a decision that clearly favored the ultra-rich and was not in the interest of the common man. The lingering question remains: who was responsible for pushing this decision?
Diamonds and precious stones are luxury commodities, predominantly purchased by high-net-worth individuals (HNIs). The average citizen, who is already struggling with the rising cost of living and various forms of taxation, gains nothing from such a reduction. So why should the nation’s revenue be sacrificed to benefit the rich? This move seems to undermine the very principles of equitable taxation and social justice, leading to the suspicion that it was driven by interests that do not align with the broader public good.
Who Benefited from the GST Reduction on Diamonds?|
The decision to slash the GST on diamonds has led to widespread speculation about who really benefited from this move. Given that diamonds are not essential goods but symbols of opulence, the tax reduction seems to have been tailored to favor a select group of wealthy individuals and businesses. Meanwhile, the nation suffers from a significant loss in revenue, which could have been used to fund essential public services, infrastructure projects, or welfare programs.
This decision also casts doubt on the integrity of the decision-making process within the GST Council. Was the Council swayed by lobbying efforts from the diamond industry? Did certain influential business houses have undue influence over the Council’s deliberations? These are pressing questions that need to be addressed to ensure that the GST system serves the interests of the broader population rather than a privileged few.
Why Aren’t GST Council Meetings Televised?
Adding to these concerns is the secrecy surrounding GST Council meetings. The nation is watching proceedings of the Lok Sabha and Rajya Sabha, which are televised live, but surprisingly GST Council meetings are held behind closed doors. Given the significant impact these meetings have on the financial health of every citizen, business, and the nation as a whole, this lack of transparency is troubling. The decisions made in these meetings affect everything from the price of everyday goods to the viability of businesses across the country. The public has a right to know how these decisions are made, who is advocating for what, and whether their representatives are truly acting in their best interests.
If the proceedings of the Lok Sabha and Rajya Sabha can be broadcast live for the nation to see, why is the GST Council exempt from such scrutiny? What stops the GST Council from televising its meetings? This lack of transparency raises suspicions about the decision-making process and whether there might be elements that the Council prefers to keep hidden from public view. Broadcasting these meetings live would not only enhance transparency but also ensure that the public can hold their representatives accountable for the positions they take during these crucial discussions.
The decisions made in these meetings have far-reaching consequences for the entire nation, and it is only fair that the public has the opportunity to see how these decisions are made. Televising the meetings would enhance transparency, build public trust, and ensure that the GST Council is held accountable for its actions.
Televising GST Council meetings and revisiting tax rates on Diamonds would be significant steps toward ensuring that the GST system is fair, transparent, and genuinely serves the interests of the nation. Decisions affecting millions of people should not be made behind closed doors but should be open to public scrutiny. Only then can we guarantee that the GST system benefits everyone, not just the elite, and that the phrase “Diamonds are forever” doesn't become a symbol of the widening gap between the ultra-rich and the rest of society.
