One lakh jewellers on strike to protest PAN rule on gold purchases
Indian jewellers were up in arms on Wednesday, with strikes called in nearly 500 cities to protest the government’s rule that makes it mandatory for customers to provide a PAN card on all jewellery transactions of Rs 2 lakh and above.business Updated: Feb 10, 2016 11:52 IST
Indian jewellers were up in arms on Wednesday, with strikes called in nearly 500 cities to protest the government’s rule that makes it mandatory for customers to provide a PAN card on all jewellery transactions of Rs 2 lakh and above.
The one-day strike, which is likely to see the participation of about 100,000 jewellers across India under more than 200 associations, is the first of many such large-scale strikes being organised ahead of the 2016 Budget in a bid to pressure the government to revoke the new norms, and to come out with a clear demarcation between gold and gold jewellery purchases.
The All India Gems and Jewellery Trade Federation (GJF), which is one of the apex bodies representing jewellers across the country, says that the government’s decision will affect gold transactions severely as a majority of people still don’t have PAN cards.
“In our opinion more than 80% of the population doesn’t have PAN cards. What is the point of having such a legislation when a large majority of the population gets affected?” asked federation director Ashok Minawala.
The government had devised the rule in December last year, and implemented it from January 1, 2016, applying it to all sale and purchase of goods and services and for all modes of payment.
The move is aimed at curbing black money or unaccounted money that is typically used to make such purchases.
However the jewellers’ federation says that such a restriction will result in an increase of under the counter payments.
“It is self-defeating as it is generally the middle class and agriculturists who purchase gold jewellery annually during festivals and marriages. Most of the black money is typically used in buying gold in bullions as the depositor would plan to convert this into cash subsequently. Why would anybody buy jewellery to hide black money? Since the current government is pro-industry, we are confident that our stance will be accepted,” said Minawala.
Although the actual monetary impact from the strike could not be ascertained, it will affect a day’s wages for the 6 crore people working in the industry, of which about 1 crore are artisans directly involved in jewellery making.
“It is a deterrent and would severely hit sales. Earlier the PAN card norm was applicable for purchases of Rs 2 lakh and above for bullion and on Rs 5 lakh and above for gold jewellery. That was practical. Now to club all purchases at Rs 2 lakh and above is wrong,” said jeweller and director at Popley and Sons. “Also, the onus is now on us to find out who is making the purchase and who owns the PAN card. It is unfair to expect us to do that,” he added.