Gold is an auspicious metal in the lives of every Indian. We buy gold for various occasions and consider it as a remark or Goddess Lakshmi. No matter whether it is marriage or any other family occasion, ornaments are one thing that no women deny to buy. For all of us, gold is an important metal which we keep with ourselves in form of coins, jewellery, and many other forms. Well all the glitter of the gold is soon going to fade away as the new mandatory tax regime and PAN card details shall upset both the jewelers and the customers who buy gold on a regular basis. This has hit the 40% sales of the gold jewellery in India.
The decision of implementing the excise duty tax of 1% which shall be applicable on the jewelers on the monthly basis is taken to curb the black money. Black money has been a continuous problem in our country and to regulate the money laundering this tax has been mandatory. Talking about the Pan card details, customers those who shop for more than Rs 2 lakhs will now require to provide their Pan card details that shall be maintained as record by the jewelers. Jewellers are now focusing on making jewelleries not more than 70-80 grams and the heavier shall be made only the advance orders placed by the customers. This shall show an adverse affect on the making of the traditional jewellery which is generally heavy as compared to other jewelleries as it comprises of the various types of semi-precious stones, diamonds, pearls and more. Other than that, customized jewellery can also face a problem as it would find problem to attract customers as they won’t be interested in purchase jewellery for which they shall require to show their Pan cards.
Government has also provided the facility of part-payment which can used in various situations, for example: If the customers buys an ornament that costs Rs 6 lakhs, for which Rs 5.5 lakh can be paid by cheque and remaining Rs. 50,000 can be paid in cash, but for this the customer has to pay the TCS for the entire amount of jewellery purchased. This shall also be applicable in case of bullions and other heavy ornaments that cost more than Rs 2 lakh. Regulations made by government could be harsh, but these play an important role in managing the flow of money and maintaining the economy accordingly.
The following are some important statements given by various important persons:
“TCS alone would reduce the entire segment of business with jewellery worth Rs 2 lakh. This segment consists of nearly 40 per cent of the entire jewellery sales, which would get affected badly,” said a senior official with the India Bullion and Jewellers Association.
“Jewellers’ sales volume would be impacted badly on switching of customers to light-weight jewellery to avoid tax glare,” said Mehul Choksi, managing director of Gitanjali Gems.
“Sentiment is very weak for the entire jewellery sector with so much of negative publicity. With this new levy, customers would think twice before buying jewellery worth Rs 2 lakh,” said Dilip Lagu, director, Lagu Bandhu Jewellers.
“The industry is facing challenging times; a vision detailing its future role in the economy and a stable policy framework is needed to allow this entrepreneur-driven, employment-intensive industry to channel its energies towards higher value creation,” said Somasundaram P R, managing director (India) at WGC.
Verdict: Gold sales shall definitely decrease but throwing a sight at the other aspect of the regulations it shall bring positive changes in the economy as the flow of black money shall soon get regulated. Government is not saying not to buy gold, instead it’s trying to make the paths transparent for all i.e. customers, jewelers and the government so as to keep a proper track of the monetary flows.
Author: Mrs. Viveka Nagar