They also want the government to increase the limit for mandatory PAN card for purchases over Rs 5 lakh instead of existing Rs 2 lakh.
Yesterday government announced increase in exemption limit for jewellers, which has brought cheer for jewellers who kept their businesses closed for over 40 days from March following imposition of excise duty on gold jewellery.
Government addressed most of the issues that jewellers had raise. Sudheesh Nambiath, lead analyst for precious metals, Asia Pacific at GFMS TR said, “The relief given to jewelers will be useful till GST is implemented as after that Rs10 lakh will be a benchmark limit and whole tax mechanism will change.” About yesterday’s announcement, he said “SSI eligibility limit from Rs 12 crores to Rs 15 crores and Rs 6 crore to Rs 10 crore in a financial year and Rs 85 lakh for the month of March, 2016 from the earlier 50 lakh is an important change while rest are clarifications that jewellery industry was anyway expecting.”
But traders are happy even as they wait for official circulars for the announcement.
“While the government has accepted most of our suggestions, which is a good sign with regards to addressing concerns of jewelers, we are now waiting for relating notifications to be issued and circular from Central Board of Excise and Customs to give the announcement a legal form. The measures, however, will boost the trade as the industry was eagerly awaiting the clarifications on the levy of excise duty,” said G V Shreedhar, Chairman of the All India Gems & Jewellery Trade Federation.
He however said: “The requirement of submitting PAN number for jewellery buying above Rs 2,00,000 is incentivising off the books trade and promoting black economy. There is a need to bring the jewellery business in organised sector. We request our government to continue their support to the industry by also raising the PAN card limit to atleast Rs 5 lakh”.
From January onwards, for jewellery buying submitting PAN number for jewellery buying above Rs 5 lakh has been made mandatory. Customers wants to avoid submitting that because they fear misuse of that number as same number can be used for other buyers without their knowledge and even PAN numbers are stolen for making forged bills by jewellers.
This has given rise of black economy and smuggling has increased, which was also incentivised by 10 per cent customs duty.
Country’s 25 per cent jewelers are in organised sector where chances of black economy are much lower and they constitute 80 per cent of business. However, PAN card requirement is again shifting trade to unorganised sector.