Synopsis :- With a view to provide significant relief to diamond merchants, the Municipal Corporation of Greater Mumbai (‘MCGM’) which is the municipal authority governing the jurisdiction of Mumbai, has come out with a circular (Circular No. AC/8/OSSC dated 31 March 2011) to reduce the rate of octroi on Gems and Jewellery items from 2% to 0.01% advalorem.
The Standing Committee / Corporation of the MCGM vide their resolution under SCR No. 1461 dated 11 March 2011 & CR No. 1122 dated 29 March 2011 have accorded their approval to reduce the rate of octroi from 2% advalorem to 0.01% advalorem for the gems and jewellery items effective at the point of import at the Custom Station/s of Mumbai with effect from 1 April 2011.
It is stated in the Circular that the reduction in the rate of Octroi is on experimental basis and for a period of 1 year w.e.f. 1 April 2011. MCGM reserves the right to increase the rate of octroi in case the desired revenue is not received on such imports into Mumbai.
LEVY OF OCTROI ON GEMS AND JEWELLERY ITEMS IMPORTED INTO MUMBAI
1 Schedule Of Articles Covered
The reduced octroi rates shall be applicable in case of the following articles specified in Chapter 71 of Octroi Schedule H
| Sr. No. | Schedule-H Item / Tariff No. | Description of Articles |
| 1 | 7101 | Pearls, Natural or cultured, whether or not worked or graded but not strung, mounted or set;
pearls, natural or cultured, temporarily strung for convenience of transport. |
| 2 | 7102 | Diamonds, whether or not worked, but not mounted or set. |
| 3 | 7103 | Precious stones (other than Diamonds) and semi-precious Stones, whether or not worked, graded but not strung, mounted or set; ungraded precious stones (other than diamonds) and semiprecious stones, temporarily strung for convenience of transport. |
| 4 | 7104 | Synthetic or reconstructed precious or semi-precious stones whether or not worked or graded but not strung, mounted or set, ungraded synthetic or reconstructed precious or semi precious stones,
temporarily strung for convenience of transport |
| 5 | 71131930 | Articles of jewellery of Gold, set with diamonds. |
| 6 | 7116 | Articles of natural or cultured pearls. Precious or semi-precious stones (natural, synthetic or reconstructed) |
2. Procedural Aspects
- In case of all sorts of diamonds octroi will be levied and recovered at Mumbai Sea Port or Air Port, where import is pursuant to a sale transaction and sale invoice is issued.
- Octroi will be levied on all interstate imports (import from outside of Mumbai limits) where the import is pursuant to a sale transaction and sale invoice is issued.
- In case of all sorts of diamonds imported from abroad, octroi will be levied and recovered at Sea Port or Air Port from the Custom House Agents (CHA) / Importers.
- The importer trader shall be required to give a self declaration as regards the details of import when the gems and jewellery items are imported indigenously,
- The traders shall be required to file the return within 30 days after the end of each quarter as regards import of all sorts of dia¬monds from out of India and purchase from outside of Mumbai.
- Octroi will be levied and recovered on import of all sorts of diamonds imported from other states along with filing of returns.
WITHDRAWAL OF THE EARLIER ORDER FOR EXEMPTION FROM OCTROI
- The exemption from payment of octroi granted by the Standing Committee / Corporation vide SCR No. 171 dated 21 May 1993 and CR No. 519 dated 13 September 1993 and circulated vide Office Order No. AC/24/Oct/93-94 dated 9 February 1994 has been withdrawn.
- As a result, the exemption from octroi earlier granted to the import of diamonds, etc. under various schemes including Open General License formulated by the Government of India will not be available to the importers.
