FM’s clarification on EL a big relief for diamond industry

Surat: In a major relief to the diamantaires of Surat, the union finance minister Nirmala Sitharaman has clarified that the e-trade of rough diamonds does not attract 2% Equalisation Levy (EL) under the e-commerce supply or services by the diamond mining companies in the foreign countries.
A delegation of the Gems and Jewellery Export Promotion Council (GJEPC) had met Sitharaman in New Delhi over the issue on Wednesday.
According to GJEPC office-bearers, the EL was introduced and amended in the Finance Act 2020 and a 2% duty was made effective on the consideration received by an e-commerce operator from the transactions including online sale of goods, provision of services etc.
During the meeting, GJEPC urged the FM to issue appropriate amendment to ensure that the diamond sector is not burdened with the EL, even when rough diamonds are procured through auctions over a digital platform.
According to GJEPC, the FM clarified that the EL was meant to tax the digital economy utilising the e-commerce platform to reach end consumers and would not apply to B2B transactions like procurement of rough diamonds through digital platforms for business purpose.
Earlier the industry experts had interpreted that procurement of rough diamonds from global miners and traders, through the e-auction process will attract additional 2%. However, with the clarification of the FM, came as a big relief for the diamantarires of Surat, world’s biggest diamond cutting and polishing hub.