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  1. PAN norms will spook jewellery buyers away, says industry, threatens to strike

PAN norms will spook jewellery buyers away, says industry, threatens to strike

Jewellery association GJF today strongly opposed the Centre's plan to make PAN card mandatory for any transaction over Rs 1 lakh...

By: | New Delhi | Updated: March 17, 2015 11:58 AM
jewellery, jewellery sales, Jewellers, jewellery purchase norms, PAN, PAN number, gold, gold buying, gold rate, gold price, gold jewellery, black money, tax evasion, business news

Jewellers say about 80 percent of the 2 billion industry’s business comes from rural customers, mainly in the agriculture sector, who lack a so-called permanent account number (PAN), which is used to prevent tax evasion. (Reuters)

Jewellery association GJF today strongly opposed the Centre’s plan to make PAN card mandatory for any transaction over Rs 1 lakh, saying the move will hit their overall sales by up to 60 per cent and threatened to go on strike if the proposal is not rolled back.

As part of measures to curb black money, Finance Minister Arun Jaitley in his Budget speech said quoting of PAN is being made mandatory for any purchase or sale exceeding the value of Rs 1 lakh.

The All India Gems and Jewellery Trade Federation (GJF), which has about 6 lakh members, including 3 lakh jewellers, said the domestic gems and jewellery industry is worth about Rs 5 lakh crore. Of this, 80 per cent comes from the rural area where people largely do not have PAN.

“We strongly oppose this proposal. This will hit jewellers and 1 crore artisans employed in this industry badly. 60 per cent of the jewellery sales will be impacted if PAN card requirement on transactions over Rs 1 lakh crore is imposed,” GJF Chairman-Elect Manish Jain told reporters in Delhi.

Jain said the association has sought appointment with the Prime Minister and Finance Minister to share their grievances and hoped that the issue would be resolved.

Asked if government goes ahead with this proposal, Jain said: “Our members are agitated and they want to go on strike. We are pacifying them, but if the talks does not go on track, we will be forced to go on strike”.

He said the jewellers want to discuss this issue with the government and strike would be the “last option”.

GJF noted that TCS (tax collected at source) is already applicable on sales of bullion above Rs 2 lakh and jewellery above Rs 5 lakh and demanded that same regime should continue.

Stating that this proposal is impractical, Jain said “There are only about 14 crore Pan Card holders, which means that 89 per cent of the population does not have PAN cards. There are only 4 crore people who files Income Tax return.”

He argued that since there is no tax on farm income, about 70 per cent the population, who depends on agriculture do not have Pan cards.

Jain hailed the government’s various steps to curb black money including the gold monetisation scheme, but said this proposal of Pan card requirement will be counter-effective.

GJF Regional Chairman Vijay Khanna said this proposal will also discourage the NRIs, who don’t have PAN card, to purchase jewellery in India.

In Mumbai, GJF Director Ashok Minawala 70 per cent of rural sales and 50 per cent of urban sales would be affected with this decision. This will also encourage 80 per cent of industry to go back to the unorganised way of business format, he added.

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Tags: Black Money

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