The jewellers in the city downed shutters for three days recently in protest against the Union Budget proposals on gold and jewellery and fear the levies proposed will hit purchases.
S. Balaji, Managing Director of Avathar Jewellers, says the real problem is that the jewellers are apprehensive of the system of implementation of the proposals.
Badri Kota of Kota Jewellers says the cost of gold jewellery will go up. The sector will now attract Excise Duty on unbranded jewellery, higher customs duty on import of gold and Tax Deducted at Source (TDS) for cash purchases of jewellery above Rs. 2 lakh.
India is the largest consumer of gold globally. The increase in Customs Duty can lead to larger import through the illegal route. A large section of the gold jewellery market is unbranded jewellery. With the proposed levies, consumers may look at other avenues of investment as gold may not be affordable. The customers may also start accepting 18-carat jewellery.
Centres such as Thrissur and Coimbatore, which are major manufacturing centres and have large volume of wholesale business, will be hit.
Thus, starting from consumers the entire sector will be hit by the proposals.
D.R. Raghunath of DAR Paradise here says since Coimbatore is a jewellery manufacturing hub, supplying gold jewellery to markets across the country and overseas too, consumption of the metal is high here.
In Mumbai and Kolkata, jewellery shops remained closed on Thursday too.
