Mumbai: The All India Gems and Jewellery Trade Federation (GJF), the national trade federation for the promotion and growth of trade in Gems and Jewellery (G&J) sector across India, has expressed dissatisfaction over imposition of requirement of PAN Card on any transaction over Rs. 1 lakh. This is not practical and will discriminate 70% of the rural buyers as they are not under tax net and does not have PAN cards. The high import duties have promoted smuggling and this new measure shall in no way stop generation of black money. The delay in lowering duty on gold only hamper our economy as black money will be generated and parked in gold. Government will require coming up with more trade friendly policies where industries can develop and grow to build the economy.
GJF however, welcome several new initiatives by the government in its budget proposals including gold monetization scheme and also bringing jewellery sector under ‘Make in India’ programme of the Government. The federation is also thankful to the government to progressively stimulate several positive changes in policy such as abolition of 80:20 Rules and opening of gold loans to the trade.
Mr. Haresh Soni, Chairman, GJF, said, “The requirement of PAN Card would discourage thousands of buyers from buying Jewellery since many of them may not have PAN card particularly people who are mostly engaged in farming and private business in rural India. We have TCS applicable on sales of bullion on Rs. 2 lakh and on Rs. 5 lakh of jewellery. The new proposal of adding a further requirement of PAN Card on sales over Rs. 1 lakh will be discriminating the 70% of the rural buyers of jewellery as they are not under tax net and do not have PAN cards. This would not be fair and justifiable under law as it tantamount to discrimination.”
Mr. Manish Jain, Chairman-elect, GJF, said, “We hope that Union Finance Minister addresses the important issue of reduction of import duty on gold which has given rise to creation of parallel economy through smuggling of gold. The FY 2015 CAD / GDP ratio is presently around 0.9% and is estimated to reduce to 0.3% in the next year. We expect import duty reductions on gold soon. The G&J industry does not generate black money but is badly affected when Government includes industry with all black money initiatives, while the real black money generation is left open.”
Mr. Bachhraj Bamalwa, Director, GJF, said, “The Make in India program can be very effective if Government will take industry into confidence. The gold monetization scheme is a very positive move and will help control the current account deficit and will allow gold depositors to earn interest and provide industry’s capital needs. The Government needs to look at the positive side of things too where an industry provides for employment to crores of people and helps the economy of the country.” Speaking on the PAN card card issue, he said that the gems and jewellery sector is not the generator of black money. More than 80% of the value of jewellery is raw materials like gold and silver which are legitimately imported in the country.”
Mr. Ashok Minawala, Director, GJF, said, “We will be facing problems of encouraging buyers to visit our showrooms since the new restriction of pan card compulsory for buying jewellery articles above Rs 1 lakh. It is a negative step for the industry as this would neutralise benefits arising out of monetisation scheme which is positive. As of last year, there are more than 14 crore pan cards issued in India. Will it be justifiable to ask for a pan card to approximately 89% of the population who do not possess one?”
GJF welcomes the progressive and pragmatic Union Budget presented by the Finance Minister and it sees the Union Budget as an extension of several positive initiatives taken by the Union Government since taking charge. It is the change in attitude of the Government towards the gems and jewellery sector and the proactive Government measures of introducing the gold monetising scheme and indigenous manufacturing of gold coins with symbol of Ashoka Chakra. Gold monetisation scheme should offer opportunity for inclusive growth of sector which includes banks, jewellers, refiners and traders. It is expected that the National Skilling Mission will take up the challenge of enhancing skills of over 2 crore people in the gems and jewellery sector as well as encourage youth entrepreneurs to enter the business.
