Jewellers across the country have intensified protest to force the government to roll back the decision on additional
cess imposed on gold bars and ornaments in the
Union Budget 2012-13.
More than one lakh bullion dealers are on strike since Saturday and have shut their shops as sign of protest. Talks were on with the government's spin doctors on Monday and but by evening, jewellers extended their strike till Wednesday.
"Due to huge pressure from jewellers across India, the All India Gems and Jewellery Trade Federation is compelled to extend the strike by two more days," the federation said.
Jewellers in Mumbai, who control over 35 per cent of the country's gold jewellery business, are planning to approach West Bengal chief minister and Trinamool Congress chief Mamata Banerjee to support their cause. "We are protesting to protect the interest of gold buyers, who will be burdened with additional taxes. This is an anti-people measure. Our business volume will slow down. Over five lakh Bengali goldsmiths are working in Mumbai and their livelihood will be severely affected. We are seeking Mamata Banerjee's support. She is pro-common man and will stand by us," said Kumar Jain, vice-president, Bombay Bullion Association.
Although jewellers claim that their main objective is to ease off the burden on consumers and gold investors, their primary concern is introducing the Tax Deducted at Source (TDS) for cash purchase of jewellery above Rs 2 lakh, which will put buyers with unaccounted money at risk. A large chunk of gold purchases are made through black money and making TDS mandatory would enable tax authorities to identify buyers and trace the unaccounted money trail.
"Major component of gold purchases are made through black money and the TDS policy will curtail sales. Buyers who want to circumvent the law to escape any possible audit trial will buy unofficially. This will encourage a parallel economy," said Vijay Bhambwani, commodity expert and chief executive officer, BSPLindia.com.
"Our main concern is that the new taxes will help revive the black market and gold smuggling, which will curb the growth of organised trade, which had gone up to six per cent from two per cent of the whole jewellery market three years ago. Consumers are not much worried as taxes may not affect them considering high prices of gold but parallel action will give a boost to smuggling and evasion of taxes," said Siddharth Mehta, chief strategist, Rajesh Exports, a Bangalore-based manufacturer in gold and diamond jewellery.
The three-day strike has caused a business loss of over Rs 2,200 crore considering the annual sales turnover of Rs 2,70,000 crore by the gold retailing business.
Courtesy: Mail Today
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