GJEPC seek clarification from Government on 2% equalisation levy on B2B e-auction of diamonds
- Jul 13, 2020 | Divita S Gupta
The Gem and Jewellery Export Promotion Council (GJEPC) has sought clarification from the Government on the applicability of 2% equalisation levy on B2B e-auction of diamonds conducted by foreign firms. In a presentation given by GJEPC Chairman Colin Shah to Finance and Corporate Affairs Minister, Nirmala Sitharaman, the GJEPC stated the term ''e-commerce operator'' is widely defined to mean a non-resident who owns, operates or manages digital or electronic facility or platform for the online sale of goods or services. The GJEPC observed that the equalisation levy could potentially apply to every transaction that has a certain element of an online interface, including the procurement of rough diamonds through e-auctions held by foreign firms. India's equalisation levy which came into effect from April 1, 2020, and its purview covers provision for online services provided by non-residents to Indian residents and could cover e-auctions as well. However, this levy has several global miners either amending terms of the contract or outrightly barring Indian resident customers from participating in e-auctions. The CJEPC has stated that the competitiveness of Indian goods will suffer as other rough diamond importing countries do not levy such a tax.