Bullion traders strike enters tenth day

Bullion and jewellery markets remained closed for tenth straight today in various parts of the country to protest imposition of excise duty on unbranded jewellery and doubling of import duty on gold.

Thousands of jewellers and their workers came out in the walled city area to demand withdrawal of the 1% excise duty imposed on non-branded jewelry, said All India Sarafa Association president Sheel Chand Jain.

Market sources claimed that the industry has lost business of over Rs 11,000 crore in the last nine days even as demand is picking up for the marriage season. Among major cities, jewellers in Kolkata and Chennai kept their establishments open.

Jewellers and bullion traders are protesting against the budget proposal imposing excise duty of 1% on unbranded precious jewellery and doubling of customs duty on standard gold bars and coins to 4%.

While jewellery showrooms kept their shutters down and sat on 'dharna' in several parts of the country, the All India Sarafa Association has written to Congress president and UPA chairperson Sonia Gandhi to look into the matter.

"We requested Sonia Gandhi as a last resort to save interest of nearly 5 lakh small  jewellers, agitating against imposition of fresh taxes," Jain had said.

A letter was also written to Finance Minister Pranab Mukherjee demanding rollback of the budgetary proposals.

Way back in 1981-82, a similar step of imposition of excise duty on gold jewellery was proposed which had to be withdrawn, according to Jain.

Traders have suggested that the government may impose 1% tax in the form of value added tax instead of levying excise duty, which would increase paper work and tax burdens for small jewellers.

Bullion traders in Kanpur have also joined the strike as nearly 368 jewellery shops remained shut. Traders have threatened to take to the streets if the Centre did not roll back the duty hike.

Uttar Pradesh Bullion Traders Association President Shyam Bihari Mishra said that new tax proposals would lead to rise of 'licence raj'.

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.

Imports may fall over 35% this year from a record 969 tonne in 2011, as hike in gold tax would discourage bullion traders and retail customers.