Medium and small gold merchants feel that the tax structure proposed in the State budget presented on Friday by Finance Minister K.M. Mani will be extremely harmful to their business prospects.
In a statement here on Saturday, leaders of the All Kerala Gold and Silver Merchants Association said the proposals in the budget would only serve to cripple medium and small traders.
President of the association B. Govindan and general secretary M. Ram Mohan Kamath said the budget proposed varying tax structure on gold purchased for manufacturing ornaments. When the purchase is from the Reserve Bank of India (RBI) and Directorate General of Foreign Trade (DGFT)-authorised sellers, the tax is 1 per cent. The tax zooms to 5 per cent when purchased from other sellers.
Çall for review
Treasurer of the association S. Abdul Nazar said the minimum purchase from the RBI and DGFT-authorised sellers is 3 kg of gold worth Rs.80 lakh at current rates. This was unaffordable to medium and small traders who constituted 90 per cent of the merchants in the gold trade sector. Consequently, these traders would be forced to pay 5 per cent tax by becoming completely reliant on other sellers. This would harm the sector and even pave the way for unhealthy trends in the sector, said Mr. Nazar. The association called upon the Finance Minister to review the proposal by discussing it with authorised persons from the sector.
