More than 2,000 gold merchants and jewellers in the State capital have closed their shops for the last 12 days forgoing an estimated turnover of Rs. 1,500 crore so far.
And the strike is likely to continue as the Centre had so far not responded to the demands of the agitating merchants.
Enhanced taxes are not an issue in this case, but the apprehensions of ushering in the ‘inspector raj' have forced the merchants to go for an indefinite strike, argues Harikishan Gupta, former president of Twin Cities Jewellers Association. Here is his take on the issue
Why are the gold merchants on an indefinite strike?
We are not against the enhancement of taxes and duties. What we dread is the harassment by the officials in the name of checking records. We have gone through such worst experiences when Gold Control Order was in force. Let the government collect enhanced taxes at the time of import of gold and be done with it.
What's your objection if the taxes are collected at the time of sale in your shop?
Let me put this in right perspective. The customs duty has been enhanced from 2 per cent to 4 per cent now. This duty is to be paid at the time of import of gold. We have no objection for this. In addition to this duty, the merchant has to pay 0.3 per cent of excise duty again on every sale. We say you make it 4.3 per cent customs duty at the time of import instead of making us pay 0.3 per cent at shop sale level. This would lead to harassment.
Why are merchants opposing TCS?
This is another problem. We are expected to collect one per cent of the sale amount towards Tax Collected at Source (TCS). For example if you buy gold or jewellery worth Rs. 2 lakh and pay in cash the shopkeeper is expected to collect Rs. 2,000 and remit it to government. We are also to collect the PAN card number of the customer. Our objection is why are you making us the tax collectors? You can collect whatever tax you want, but why make us responsible for collection and remittance. This is where the officials can harass us.
How can they harass you?
For example, if someone gives a false PAN card number, how are we going to verify this? If a farmer wants to buy gold worth around Rs. 2 lakh what do we do? A farmer does not come under income tax and would not have a PAN card. Most of the people do not have a PAN card now.
What do we do then? What we are asking the Central government is to remove these conditions using which officials come to verify records and harass. The government, by all means, can collect whatever taxes enhanced in the latest budget. We only request the Centre to withdraw these rules.
