Jewellers go on strike against duty hike on gold

Jewellers across the country will stay closed for three days from Saturday, to protest against the hike in excise duty on gold announced by union finance minister Pranab Mukherjee. The more than 5000 jewellers in Gujarat, including around 1,000 in Ahmedabad, will stay closed along with nearly 5 lakh jewellers across the country.

While presenting the Union Budget in parliament on Friday, the finance minister proposed to increase basic customs duty on standard gold bars, gold coins and platinum from 2% to 4%; and on non-standard gold from 5% to 10%. In sync with these hikes, basic duty on gold ore, concentrate and dore bars for refining is being increased from 1% to 2%. On the excise side, duty on refined gold has been increased in the same proportion from 1.5% to 3%.

Shanti Patel, president of Gem & Jewellery Trade Council of India, said this move will cause unnecessary harassment to small jewellers in the country. "Hence, jewellers across India, including retailers from Gujarat, have called for the strike. We all will remain closed till Monday night," said Patel. If the hike in duty is not rolled back, incidence of tax evasion is likely to go up. 
"Small and medium jewellers will be forced to evade tax if excise duty is increased," said Patel. Nanalal Soni, president of Ahmedabad Gold-Silver Jewellery Traders' Association, said that world over all, countries are liberalising norms to encourage their citizens to invest in gold.

"It seems the government has imposed a mini gold control act. The finance minister's proposals will make gold costlier and people will be discouraged to invest in the yellow metal," Soni said. He added that gold is one means of savings for common people and, if it is discouraged, people are likely to put their money in unproductive avenues.