Surat: At a time when the diamantaires have taken to the online platform to source rough diamonds due to the restrictions on international flights, 2% equalisation levy (EL) imposed by the central government on all the overseas e-commerce transaction from India has pushed up prices of rough diamonds.
The diamond traders have asked the central government to remove the EL.
Diamantaires stated that though the world’s largest diamond trading hub Antwerp is under lockdown due to increase in the Covid-19 cases till December 13, they have been ordering the roughs online through the e-commerce portal and facing an additional tax burden of 2% EL.
The prices of rough diamonds have already appreciated 15% in secondary markets of Surat and Mumbai due to the suspension of international flights. The import of rough diamonds declined 56% to $2.5 billion between April-September compared to $5.8 billion during the same period previous year.
Chairman of Gems and Jewellery Export Promotion Council (GJEPC), Colin Shah told TOI, “Due to Covid-19, the diamond trade happens over e-commerce portals. However, due to EL, there will be additional taxation burden on the trade fraternity.”
Shah added, “The industry is facing heavy loss in exports already and now this additional 2% EL tax is unfair to the industry. In our last meeting with union finance minister, we had urged government to remove the EL clause. We are hopeful that we will see amendment soon.”
Kirti Shah, importer of rough diamonds told TOI, “Since the lockdown, the orders for rough diamonds are placed online for the supply by the companies. The EL is making a huge difference to our production cost when the margins in diamond processing is already very low.”