Diamond traders contacted the government requesting to eliminate the 3% Goods and Services Tax (GST) on Business to Business (B2B) transactions. The traders reasoned that dispatching polished diamonds from surat manufacturing unit to their Mumbai branch office is favouring GST, which is making their business in the loss. At this time, the global demand for diamonds is also slow making further hurdles to grow in the domain.
Dinesh Navadiya, President at Surat Diamond Association, told, “This 3 percent GST is creating a lot of problems. The government should do something to ease them.”
Industry experts have explained that a serial number of the invoices (delivery challan) for diamonds transaction needs to be kept under the new indirect tax regime. There is a confusion between the traders that whether the challan should emerge on the name of the broker or not. If the diamond should not be issued on the broker name, then whose name needs to be furnished in the respective block because the broker is the relevant person who carries the items to the different buyers.
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It is possible that due to security reasons, the delivery challan may not contain the real value or full value of the goods. It can be quite worrisome for different buyers to emerge delivery challans as long as reverting the items even where it is cancelled instantly because they would be displayed numerous items for consent on daily basis.
A systematic flow of supplies needs to be accomplished so that diamond suppliers can get a clarification from the government that the broker dealing in between is not an agent who can establish supplies on behalf of the diamond seller, however, is only a courier carrying the items for a static fee.
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So, dispatching the goods by means of a broker on consent basis is not liable to pay GST tax.
