Bullion traders strike enters 13th day

The strike by bullion traders and jewellers to protest the proposed increase in import duty on gold and imposition of excise duty on unbranded jewellery entered the 13th day today.

Most jewellery houses remained closed ever since the Finance Minister Pranab Mukherjee in his budget proposals on March 16 announced 1% levy on unbranded jewellery and doubling of import duty to 4% on gold.

Striking associations in different part of the country have collectively decided to go for a complete closure of bullion markets in major as well as small towns on Friday, said All India Sarafa Association President Sheel Chand Jain.  

He said the strike will go on for an indefinite period until the government rollback the taxes imposed on the bullion trade.

However, bowing to protests by jewellers and demands in Parliament, the Finance Minister Pranab Mukherjee earlier this week hinted at a rollback of the excise duty on unbranded jewellery but ruled out a similar move in case of the hike in import duty on gold and platinum.

"I understand the plight of small jewellers... I am considering it... The period that will be available from now and [passage of] Finance Bill, I will come out with an acceptable formulation," Mukherjee had said in his reply to the general discussion on the Budget in the Lok Sabha.

Market sources claimed that the industry has lost business of over Rs 18,000 crore in the last 12 days even as demand is picking up for the marriage season.

The government had proposed a hike in import duty on gold bars, coins and platinum to 4% from 2%, after doubling the tax in January. A levy on gold ore, concentrate and so-called dore bars (a semi-pure alloy of gold and silver) for refining will be doubled to 2% and an excise tax on refined gold will climb to 3% from 1.5%.

Traders have warned that imposition of higher levies may lead to a rise in retail gold prices by over 6% in the country, which is seeking to rein in a widening current account-deficit partly fuelled by record purchases in 2011.