Officials are impounding cash and merchandise, which restricts mobility
The Indian diamond and jewellery industry is perturbed by the model code of conduct in place during the country’s ongoing elections. According to the rules, which are in place during elections, transactions in cash above Rs. 50,000 require proper documentation.
This is having a major impact on the industry, according to Harish Soni, Chairman, All India Gem & Jewellery Traders’ Federation (AIGJF). “The main problem is mobility because both goods and money need to move to-and-fro in this industry. The onus is on the transporter, in several cases, the ‘angadias’ to prove that the cash is not being used for election canvassing.”
Mr. Soni said AIGJF, the nodal body representing interests of lakhs of members, had been informing its members and the public of the documents that must be carried in transit.
“The person has to establish himself as a businessman and prove that the cash being carried has been generated by his business.”
“What is happening is a hindrance to legitimate business,” said Nilesh Gupta, Chairman, Administration Committee, India Bullion & Jewellery Association (IBJA). “It is a case of high-handedness. The income tax officials are harassing the industry unnecessarily. Everyone is fully aware that the industry has a huge cash and merchandise flow and these are an integral part of our business operations.”
A diamond trader said officials were impounding cash and merchandise and telling traders to collect the same post-elections.
Vipul Shah, Chairman, Gem & Jewellery Export Promotion Council (GJEPC ,who was in New Delhi on Thursday to meet government officials to sort out the issue, told this correspondent, “business has almost come to a standstill.
Smaller diamond traders in Gujarat deal only in cash and they are now afraid.
Cutting and polishing activity which is concentrated in several towns and cities in Gujarat like Surat and Rajkot are affected.’’
He lamented that at a time when rough diamonds were hit by a declining price trend , Indians traders and jewellers were unable to buy stock because the rules now in place.