As the nation-wide strike by jewellers enters its third week, jewellers seem adamant on their demand for a complete roll-back of the increase in excise duty announced in the Union Budget 2012-13.
On the eve of the meeting of various jewellery associations with Finance Minister Pranab Mukherjee on April 6, the jewellery associations insisted that there should be no half measures and that they would only be satisfied with a complete roll-back.
A visit to Zaveri Bazaar, Mumbai's gold jewellery market, which is estimated to handle around a third of the country's gold trade, clearly reflects the mood with scores of shops having downed their shutters. An eerie calm pervades the area, which one would find difficult to traverse during the otherwise manic business hours.
The Union Budget's three proposals of imposition of excise duty on unbranded jewellery, tax collection at source (TCS) and the doubling of customs duty have riled the jewellers, and the industry, under the aegis of the All India Gems & Jewellery Trade Federation (AIGJTF), wants all the proposals rolled back.
Bachraj Bamalwa, Chairman, AIGJTF, and Chairman of Kolkata-based Nemichand Bamalwa Jewellers, said, “It is a Rs.3-lakh crore industry and this nation-wide strike spread over the last three weeks has resulted in a loss of around Rs.18,000-20,000 crore for us. It must be realised that because of the strike, the government, too, has lost around Rs.800 crore (due to import duty of 4 per cent and value-added tax of 1 per cent) during the period. The imposition of the effective 0.3 per cent rate will result in additional revenues of only Rs.150-200 crore per annum for the government. However, it is not a revenue issue but a compliance issue.”
He explained that with all jewellery being hand-crafted, the industry was process-intensive and making a piece of jewellery involved about a dozen processes with movement of goods across locations. “Now, if they all require documentation for computation of duty, it would be highly cumbersome and it is unlikely that small and medium-sized outfits can comply. It could also lead to unnecessary harassment.”
Mr. Bamalwa said that the federation had on March 19 and March 29, filed representations to the Finance Minister and the Ministry of Finance and explained the difficulties that would be faced by the industry.