Mumbai: A senior official of the Ministry of Commerce & Industry, Mr. Siddharth, DG, DGS&D held a meeting with delegations from De Beers, Rio Tinto and Dominion Diamond in the presence of representatives of the GJEPC and BDB on July 6, 2015 to discuss certain issues pertaining to taxation, procedures and other matters related to the Special Notified Zone for trading in rough diamonds that is being established within the BDB.

The meeting commenced with a presentation on the SNZ by Ajesh Mehta and Sabyasachi Ray following which the different delegations expressed their willingness to participate, but requested clarifications on various aspects of the project. Some of the major points raised were:

• Clarity on tax beneficiation on sales that will take place
• Clarity on tolerance for weight at the time of re-export of goods as compared with import
• Trading norms for viewing and sale should be defined
• Mixing of lots for two mining sites needs to be allowed as soon as possible in future
• Clarity on whether the domestic goods from Indian office of the mining company can be allowed for viewing and sale in SNZ premises. Lots will be identified and kept separately
• Tax easiness for invoicing done by Indian office of mining company
• Withholding Tax / Transfer Pricing / FEMA regulations etc.
• Clarity on local taxes like VAT / Octroi / Stamp Duty etc.
• GR waiver already issued by RBI to be circulated to banks and other stakeholders
• Service charge by IDTC for using the facility
• Clarity on IEC code and whether Import will be made by IDTC for custom documentation

Further, Dominion requested for a clarification on Transfer Pricing issues, since the company may wish to generate invoices in India on goods already at its India office that are sold in the SNZ.

De Beers asked for clarification regarding the provisions of any Double Tax Avoidance Agreement (DTAA) that India may have signed with any of the mining countries.

On behalf of the Commerce Ministry, Mr. Siddharth requested the delegations to out forward these issues in writing as that would facilitate taking them up with other concerned departments and addressing them speedily.