In a bid to crack down on hoarders and launderers of black money, the Narendra Modi government has come up with a new plan. Now, the government is preparing the new rules to keep a strict watch on the gems and jewellery sector. Retailers would soon have to report purchases above Rs 6 lakh to the Financial Intelligence Unit. As per a Hindustan Times report, the new rules would also apply to retailers of other luxury goods. The government believes that apart from helping government agencies such as the Enforcement Directorate detect money laundering, these reports could also help the Income-Tax department identify individuals whose purchases are disproportionate to their known sources of income.
This is not the first instance when the Modi government has come out with a plan to curb black money in jewellery sector. In August last year, the government had brought gems and jewellery dealers under the Prevention of Money Laundering Act (PMLA). However, in October itself, the government then reversed its August order. Then Revenue Secretary Hasmukh Adhia had said the government would notify a new threshold for reporting to authorities about transactions in gold and other precious metals and stones with a view to curbing parking of black money in bullion, as per media reports.
The National Democratic Alliance (NDA) governemnt has announced several other measures to crack down on black money and money laundering, including deregistering shell companies that exist solely to facilitate such transactions and strengthening the Benami Transactions Act. Notably, post demonetisation, the government had increased scrutiny of cash transactions, banning those above Rs 2 lakh and reporting of PAN for any transaction of Rs 50,000 or above.