In re KGK Diamonds (I) Pvt. Ltd (CAAR Mumbai)
The Customs Authority for Advance Rulings (CAAR), Mumbai, considered an application filed by KGK Diamonds (I) Pvt. Ltd. seeking an advance ruling on the classification of natural rough diamonds bearing Galaxy/DiaExpert markings and their eligibility for exemption under Serial No. 345 of Notification No. 50/2017-Customs dated 30.06.2017. The applicant proposed to import natural rough diamonds scanned and mapped using the Sarine Galaxy® system and sought confirmation that such diamonds remained classifiable as natural rough diamonds under Customs Tariff Heading (CTH) 7102.31 and continued to qualify for Nil customs duty under the exemption notification.
The applicant explained that rough diamonds are a key raw material for manufacturing cut and polished diamonds and are imported from international markets. Under Chapter 71 of the Customs Tariff, gem-quality non-industrial rough diamonds are classifiable under CTH 7102.3100 and attract Nil duty under Serial No. 345 of Notification No. 50/2017-Customs. The notification was later amended by introducing Serial No. 345A for simply sawn diamonds following disputes regarding their classification.
According to the applicant, the proposed imports would consist of natural rough diamonds mapped using the Sarine Galaxy® system. The mapping process creates a three-dimensional model of the diamond’s internal structure to assist in planning the optimal cutting and polishing process. The applicant emphasized that the technology is non-invasive and does not involve sawing, cleaving, bruting, or any physical alteration of the diamond. It submitted that the diamonds remained unworked and therefore continued to be classifiable under CTH 7102.3100 with eligibility for exemption under Serial No. 345.
