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| GJF objects tax on gross assets in DTC |
| BS Reporter / Mumbai/ Ahmedabad Jan 05, 2010, 00:50 IST |
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Seeks no seizure of jewelers’ stocks
All India Gems and Jewellery Trade Federation (GJF), a national body of the jewellery trade in the country, today objected the provision of 2 per cent tax on gross assets in Direct Taxes Code (DTC). The trade body has approached union finance ministry seeking modifications in DTC.
"GJF is opposed to 2 per cent tax on gross assets since the industry operates on small margins with high inventory levels. In this case, a company earning 2 per cent net profit will require to pay the same tax as a company earning 8 per cent net profit," explained Haresh Soni, chairman, promotions, events and development committee of, All India Gems and Jewellery Trade Federation.
The federation is also opposed provisions with regard to search and seizure as well as TDS on all payments. According to GJF the seizure of such stock-in-trade of jewellery, bullion and precious stones would create great difficulties for the assesses of the industry as it would result into cessation of their manufacturing operations resulting into break down of their entire business activity.
"Also, the deduction of 10 per cent tax on all payments made for gold, diamonds, jewellery etc, would result in blockage of working capital for the industry, which is facing a major liquidity crunch. Certain schedules proposed in the DTC like search and seizure provisions are highly penalizing to the industry which is already reeling under the effects of global recession," he added.
The association believes that if the suggestions are not considered and necessary changes are not incorporated in the DTC, the proposed provisions will be highly detrimental to the operations of the assessees of the gems and jewellery Industry and have the potential to adversely affect the very sustenance of such assessees.
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