India's diamond industry is now under Income Tax Department surveillance as several investigations have unearthed fraudulent transactions on the books.
India is the largest diamond cutting and polishing centre in the world, accounting for about 95 percent share of the global market by number of pieces. The country is also the third largest consumer of polished diamonds.
Compared to real estate, which is also home to a horde of black money transactions, the books of diamond industry is found to be mostly forged and the tax frauds are reported to have risen to alarming levels. The activities are turning more intricate and sophisticated, making it harder for the authorities to cull such illegal operations. Presence of tax haven countries compounds this exigency of the situation.
Nevertheless, the Income Tax Department of India is relentlessly pursuing to bring the perpetrators to book, and has already decided to deploy 10 officers in ten such tax haven countries as an effort to bring down the fraudulent activities, senior IT officials said.I
Surat is India's diamond processing hub, contributing over 80 per cent of the country's diamond processing industry with annual revenue of around US$ 13.03 billion.
The diamond jewellery industry grew 30 per cent in calendar year 2010, as consumers are attracted towards using items as both luxury fashion and investment. The industry is set to continue its growth momentum this year. During calendar year 2011, it is poised for 20 per cent growth.