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China will allow diamond processors and traders to enjoy a tax break on the gems from July 1, Xinhua news agency said, citing a government notice.

The current 17 percent value-added tax levied on unprocessed diamond imports sold locally will be waived if they are sold through the Shanghai Diamond Exchange, the report said.

Products that are processed from imported diamonds will be subject to 4 percent tax, down from 17 percent now, it said. The report, citing a joint notice from the Ministry of Finance, the Customs General Administration of China and the State Administration of Taxation, said the tax break will also apply to domestic miners that sell diamonds to local processors via the Shanghai Diamond Exchange.

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