March 26th, 2012 10:19 EST
Gold Dealers in Kashmir Protest Excise Duty on Jewelry
All Jammu and Kashmir Gold Dealers Association protested against recent 2012-13 Union Budget announcement of charging to bring unbranded precious jewelry under the excise duty net and raise customs duty on gold bars and coins.
Over 500 jewelry shops in Kashmir division, of which over 100 are concentrated in the old city, have remained shut against the Union Budget for 2012-13 which proposed excise duty of one percent on unbranded precious jewelry and doubling customs duty on standard gold bars, gold coins and platinum to four percent and one percent VAT.
Gurnaam, a gold trader told Agence India Press that, they allied with this trade at many places took to the roads and staged demonstrations claiming that the move would not only affect the livelihood of thousands of people involved with the industry but also give birth to smuggling.
"Raising the duty further to four percent will encourage smuggling even more," he added.
Endorsing about the increase in customs duty for the sector, Gurnain Singh, owner of city-based jeweler shop said after the duty was raised to two percent some two months back. "Now, cost of jewelries in India will increase more compare to international markets and around 34 percent of price hike has already been recorded in past one year," he added.
"For customers, the proposal would mean at least seven or eight percent increase in prices with immediate effect. Jewelers say ornaments may now cost eight percent more (a minimum of Rs 2,400 per 10 gm). "We don`t have a choice other than to participate in the nationwide protest," said another gold trader.
The overall sale of gold coins is set to increase, as the government waived three per cent of excise duty on coins of purity 99.5 and above. "All coins currently sold in the country entail a purity of 99.5 per cent and more," said Singh.
Chairman also quoted that as per the amendments made in excise Section that provides that cases of evasion in which the duty leviable exceeds Rupees one lakh shall be punishable with a term of imprisonment extending to seven years and with fine. The section is being amended to substitute this amount with Rupees twenty five lakh and this will give birth to smuggling.
(AIP News): http://agenceindiapress.com