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NEW INDIAN TAX ‘DOESN’T APPLY TO ROUGH SALES’ | 27 AUGUST 2020

Rough trading does not incur India’s new e-commerce tax, the country’s Gem and Jewellery Export Promotion Council (GJEPC) confirmed after meeting with finance minister Nirmala Sitharaman.

India introduced the equalization levy on April 1 for all overseas e-commerce operators. The minister explained that the new tax applied only to digital consumer sales and not business-to-business trading such as online rough-diamond sales, the GJEPC said in a statement Thursday. The government will issue a clarification soon, the organization added.

The new levy created uncertainty in the rough trade, as more mining companies are selling via online platforms due to travel restrictions during the coronavirus pandemic.

Following the clarification, Petra Diamonds suspended a 2.041% levy it had been charging its Indian clients. The miner on Monday informed buyers it was adding the fee to cover the possibility that rough sales through its online bidding platform attracted the tax.

“We can confirm a temporary suspension of our earlier decision, pending formal announcement from the Indian government to confirm this position,” a Petra spokesperson stated in an email to
Rapaport News.

Diamond miners and traders would likely revise their prices if their sales incurred the tax, GJEPC chairman Colin Shah noted. Leading rough producers had asked the GJEPC for clarification, he said.

“With the Covid-19 pandemic, for business continuity [all] transactions and business trade [are] happening online or by e-commerce platforms,” Shah commented. “With the advent of [the equalization levy], India would lose its global competitive edge.”

- Article Courtesy Diamonds.net - Find It Here