BHUBANESWAR: The jewellery sector on Saturday resorted to a complete shutdown in the State protesting the Centre’s decision to levy Excise and Customs duty, and Consumer Tax on the entire gamut of the business. More than 5,000 jewellers, both big and small, in Bhubaneswar, Cuttack, Berhampur and Rourkela along with other major cities and towns joined the three-day strike called by the All India Gems and Jewellery Trade Federation (GJF), beginning Saturday. The tax measures in the Budget are detrimental to both the jewellery industry and the consumers, member, Governing Board of Directors, GJF, Sanjay Hans of Lalchand Jewellers said. He also demanded a rollback of the measures. The Budget has increased duty on gold imports from 2 to 4 per cent while extending the 1 per cent Excise duty to all kinds of gold jewellery from the earlier branded jewellery only. It has further imposed Service Tax on making charges on jewellery and introduced tax collected at source (TCS) of 1 per cent on purchase of a minimum Rs 2 lakh worth of jewellery or bullion. The industry is going to suffer seriously due to the levy of taxes as it will amount to more paperwork and cumbersome procedures for the jewellers. The big players can manage, but the industry constitutes predominantly small and medium shop owners who would find it extremely difficult to conform to all the procedures, the body said. “The jewellers and merchants will now have to do the paperwork for VAT, Excise and Service tax at one go. The TCS will also pose a major problem as with the prevailing prices, a substantial chunk of buyers will conform to the minimum Rs 2-lakh stipulations. The shopkeepers will thus have to ask for PAN cards, do more paperwork and deposit the tax collections with the IT Department,” another member of the Board of Directors of GJF Mitesh Khimji of Khimji Jewellers here said. The levy of taxes would jack up gold prices by at least 6-7 per cent. There would also be a similar difference between gold prices in India and world market. “This would encourage smuggling and blackmarketing of jewellery. Revenue collections will also suffer due to increased non-compliance. The jewellery trade has been taking significant strides to organise itself in the past 10 years but these measures would push the sector backward,” Khimji said.
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