The Gems and Jewellery Export Promotion Council (GJEPC) has made a strong representation to Union finance minister Arun Jaitley for introducing a scheme under Goods and Services Tax (GST), whereby all business-to-business (B2B) transactions between import and export of diamonds are in a no-tax situation.
A delegation of GJEPC office-bearers led by its chairman Praveen Shanker Pandya and comprising Surat Diamond Association (SDA) president Babu Gujarati, Surat and Navsari MPs — Darshana Jardosh and C R Paatil — and Union minister of state for road transport Mansukh Mandaviya called upon Jaitley in New Delhi to discuss GST issues on Thursday. According to GJEPC, business transaction in polished diamonds attracts 3 per cent GST. From manufacturing to trading and final export, diamond packets exchange many hands. At each stage, diamantaires and traders have to pay three per cent GST due to sale. This amounts to accumulation of input tax credit and blockage of huge amount of capital.
The GJEPC office-bearers requested Jaitley to consider introducing a scheme which emulates key competitors like Belgium and Israel by creating a group in terms of Section 148 of CGST Act and SGST Acts, 2017. Under the group GST scheme, all B2B transactions between registered members of GST group should be exempted at nil rate or taxing at nominal value. SDA president Babu Gujarati told TOI, “There is a serious issue concerning huge blockage of input tax credit due to multiple tax at every stage of diamond transaction. We have asked to speed up refund of tax credit as well as introducing GST scheme for all B2B transactions between registered members and provide exemption or charge at nominal value.” Source – TOI