A delay in issuing new invoices after changes to China's VAT law is hindering efforts of jewellers to sell more products.

Shanghai Diamond Exchange (SDE) traders now only pay four per cent VAT rather than 17 per cent, but invoices for imports of loose polished stones – which are often set in platinum are yet to become available.

"When the authorities issue the official invoices we can finalise the sale in mainland China of our goods, currently at SDE," one SDE member said.

Tax rates were changed on July 1st and many Chinese traders think it will help them gain an edge over foreign jewellery traders, but the invoice system still needs to be put in place.

Despite the delay, traders are said to be optimistic that the VAT changes will boost demand and the legitimacy of the market.

Once the invoice system is in place, which could be as late as September, jewellers are confident that it will push up sales of diamonds and the metals used to set the stones.

Ohad Hecht of Dalumi Diamonds added: "Consumers in China will eventually have more access to goods that are more competitive in all aspects, boosting demand for diamond jewellery in the market."


Ÿ Adfero Ltd