Jewellers today started their three-day pan-India strike to protest proposed re-imposition of 1 per cent excise duty on gold and diamond jewellery and mandatory quoting of PAN by consumers for transaction of Rs 2 lakh and above.
More than 3 lakh jewellers participated in the strike on Day 1, an industry body claimed.
"Over 300 associations, that consists of over 3 lakh manufacturers, retainers, artisans among others, participated in the stir across the country. The strike has been 100 per cent successful," All India Gems and Jewellery Trade Federation (GJF) Chairman Sreedhar G V told PTI.
Sreedhar said the gems and jewellery industry has been forced to go on strike due to the government's apathy towards the sector reflected in the proposal to re-impose 1 per cent excise duty in the Union Budget presented by Finance Minister Arun Jaitley on February 29.
"We were already facing challenges and businesses have gone down by 25-30 per cent after the Government's decision in January to make PAN cards mandatory for any transaction of Rs 2 lakh and above. Instead of increasing the slab to Rs 10 lakh from Rs 2 lakh and reducing the customs duty to 2 per cent from 10 per cent, the Government has created more difficulties by re-introducing 1 per cent excise duty," he rued.
He said in 2005 and 2012, the Centre had introduced 1 per cent excise duty in the gems and jewellery sector, but had to drop the move as it was not deemed practical with the industry comprising mostly under-educated but highly skilled people who are not equipped to handle the paper work required for it.
Jaitley proposed 1 per cent excise duty on jewellery without input credit or 12.5 per cent with input tax credit on jewellery, excluding silver other than studded with diamonds and some other precious stones.
Meanwhile, a GJF delegation plans to meet Finance Ministry officials with a representation to explain difficulties faced by the industry with these measures. Sreedhar said jewellers will take a call on future course of action after their meeting with the officials.
The size of domestic industry is estimated to be around Rs 3.15 lakh crore with the potential to grow to Rs 5 lakh crore by 2018.
(REOPENS BOM 20)
Former Union minister Milind Deora said in a letter to Finance Minister Arun Jaitley: "I write to you sharing the deep concern of the gem, jewellery and gold traders associated with the industry from Mumbai. The Finance Bill 2016 tabled in the Parliament has proposed 1 per cent excise duty on gold and diamond jewellery. This proposal will have an adverse cascading effect on the market, traders and consumers."
He stated the market of gems, jewellery and gold is in "poor health" and its growth is challenged due to prevalent domestic economic condition, shrinking global demand and slowdown in export markets.
"Jewellery sales are at an all time low in the last two months due to higher gold prices. An import duty thus discourages a consumer from purchasing, negatively affecting the sales prospects. This has forced importers to offer a discount of up to USD 53 per ounce to clear inventory," he wrote.
He said the government, rather than introducing mechanism to boost domestic demand and usher exports, is taking steps to "destroy" the growth prospects of an industry that has tremendous potential and significant share in national growth.
"There is a great expectation from programmes like 'Make in India' which promises a regime to conduct business free from complicated tax environments and laying a red carpet for foreign investors. Your tax proposal to levy 1 per cent duty on gold and diamond has sent a contradictory message to domestic industry and has shaken their faith in your government.
"The existing taxation, state of the demand and supply, global conditions and the biggest fear of being harassed by tax authorities makes a compelling case for recalling this tax proposal. I seek your urgent and swift intervention in this matter," he said.
