Over 2,000 jewellery shops downed their shutters here from the afternoon of Saturday in response to a call given by the Tamil Nadu Jewellers' Federation to protest some of the proposals in the Union budget.
The shutters were downed at 2 p.m. in all shops on the busy South Avanimoola Street and Jhansi Rani Park areas in protest against the increase in import duty from two per cent to four per cent and levy of one per cent excise duty on platinum and gold. M. S. Balasubramanian, president of the federation, said that the duty increase would mean an increase of over Rs. 100 per gram of gold. The increase in service tax would also take it further above.
Mr. Balasubramanian said that those in the bullion trade were of the view that it would not be possible to insist on identity proof when a person made a purchase of gold over Rs. two lakh. The jewellery shops had also been asked to make tax deduction at source for purchases of over Rs. two lakh. The ruling prices of gold were so high that even a jewel weighing 10 sovereigns would cost more than Rs. two lakh. The duty revision and insistence on id proof would only encourage evasion. If one shop insisted on production of identity proof, the buyer might go to another where he would not be required to reveal his identity. Mr. Balasubramanian said that the strike would end on Monday.
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J. Loganathan, treasurer, Madurai Jewellers and Bullion Merchants' Association, said that the new measures had come as a blow to the bullion trade.
He pointed out that most of the buyers, especially those from rural areas, would not be in a position to produce identity proof while buying jewels.