In protest against excise duty
Jewellery showrooms across the city will remain closed for three days from Saturday in protest against the hike in customs duty and introduction of excise duty for non-branded jewellery as proposed in the Union Budget.
The Budget has proposed a hike in duty on gold import from two to four per cent and levying excise duty of one per cent on all types of jewellery. Jewellers feel this could lead to harassment as they would have to deal with more government departments.
For customers, the Budget proposal would mean at least seven or eight per cent increase in prices with immediate effect. Jewellers say ornaments may now cost a minimum of Rs. 800 more per sovereign. “We don't have a choice other than to participate in the nationwide three-day bandh to show our protest. The increase in customs duty will only encourage illegal imports instead of purchases from banks,” said a member of Tamil Nadu Jewellers' Federation. On Friday, one gram of 22-carat gold was priced at Rs. 2,613 and one gram of silver at Rs. 61.
The Budget announcement left many customers worried over the volume of price hike of the precious yellow metal, which is already out of reach for many. “My relatives told me that the price has dipped and I came here to buy gold bangles for my daughter's wedding. We are already on a shoestring budget and I have to restrict the purchase,” said Ranjini Sekar, a resident of Mylapore. Customers like V. Bhuvana plan to increase savings through jewellery chits as they think purchasing gold ornaments on cash would be impossible for them.
Jewellers in NSC Bose Road, which is also the wholesale hub of gold jewels, said that the locality has witnessed mushrooming of shops selling gold-coated ornaments as the price of the yellow metal has increased.
Goldsmiths like B.Saravanan, who are already being paid less, are worried that the orders would now drop further. The exemption of branded silver jewellery from excise duty would not have much impact as Chennai does not have much branded items. N. Anantha Padmanabhan, regional chairman, All India Gem and Jewellery Trade Federation, said that besides value-added tax, customers would also have to pay service tax. Those buying ornaments worth above Rs. 2 lakh would have to shell out for tax collected at source too.
The duty on gold import was recently increased from one to two per cent. The sale has already dropped by 20 per cent in the past four months due to spiralling cost of the precious metal.