Bullion and jewellery traders in various parts of the country went on strike for the sixth straight day today to protest the hike in import duty on gold and excise levy on unbranded jewellery.
Bullion traders in Kanpur have joined the indefinite strike to protest the excise duty hike. Around 368 jewellery stores remained closed there leading to heavy losses. Traders have threatened to take to street if the Centre did not rollback the duty hike.
Uttar Pradesh President of Bullion Traders Association Shyam Bihari Mishra said that jewellery traders will be devastated with the government's new tax proposals, leading to rise of 'licence raj'.
While bullion traders in Mumbai returned to work after three days of strike, most of the leading jewellery stores remained shut in major cities, President of the All India Sarafa Association Sheel Chand Jain said.
The association had written a letter to Finance Minister Pranab Mukherjee demanding rollback of the budgetary proposals.
"The proposed increase in import duty will lead to unchecked smuggling of the metal. This increase of import duty should be withdrawn in the larger interest of the trade and consumers," the letter had said.
Traders were protesting the budget proposal imposing excise duty of 1% on unbranded precious jewellery and doubling of customs duty on standard gold bars and coins to 4%.
Market sources claimed the industry has lost Rs 5,000 crore business in the last five days and it might rise further with more markets like Uttar Pradesh and neighbouring areas joining the protest.
Traders warned that imposition of higher levies may lead to a rise in retail gold prices by over 6% in the country, which is seeking to rein in a widening current account-deficit partly fuelled by record bullion purchases in 2011.
Imports may fall between 30% and 35% this year from a record 969 tonne in 2011, while the industry might face more difficult time in coming days as marriage season begins, traders said.
Non-branded jewellery under the ambit of excise net of 1% would ruin small jewellers in the country, Jain of All India Sarafa Association said.
Earlier, The All-India Gems and Jewellery Trade Federation Chairman Bachhraj Bamalwa had said that the small jewellers are irked with the proposed levy of excise duty as they do not understand the legalities of it.
