Jewellery sales will be hit by more than half in urban areas and 70 per cent in rural areas if the Budget proposal to mandatorily quote PAN for any purchase worth over Rs 1 lakh is accepted, industry body All India Gems and Jewellery Trade Federation (GJF) said today.
As part of measures to curb black money, Finance Minister Arun Jaitley in his Budget speech said quoting of PAN is being made mandatory for any purchase or sale exceeding the value of Rs 1 lakh.
Pressing for rollback of the measure announced in the Union Budget, it also said that this will encourage 80 per cent of the industry to return to the unorganised way of conducting business.
"We will face problems with the new restriction of making Permanent Account Number (PAN) card compulsory for buying good valued at over Rs 1 lakh...It will restrict buyers to visit our showrooms and is a negative step for the industry. This will neutralise benefits out of the monetisation scheme, which is positive," GJF Director Ashok Minawala Director told reporters here.
He claimed that 70 per cent of rural buyers are not under tax net and do not have PAN cards.
Further, he said: "High import duties have promoted smuggling and this new measure shall in no way stop generation of black money. The delay in lowering duty on gold only hampers our economy as black money will be generated and parked in gold.
"The government needs to bring down the import duty to 4 per cent from the current 10 per cent. It will require to come up with more trade friendly policies where industries can develop and grow to build the economy."
Overall, he said, 70 per cent of rural sales and 50 per cent urban sales will be affected with this decision, he said adding that it will also encourage 80 per cent of industry to go back to the unorganised way of business format.
Minawala said GJF has written a letter in this regard to the Finance Ministry. "We are expecting the government to take a decision on this in a week's time," he added.
Asked if the association will go on strike if the decision is not in favour of the industry, Minawala said, "If the industry loses its patience, we may resort to strike. Meanwhile, we are positive that the government will be quite pragmatic while taking the decision."
Meanwhile, GJF welcomed several new initiatives by the government, including gold monetisation scheme and also bringing jewellery sector under 'Make in India' programme, abolition of 80:20 rules and opening of gold loans to trade.
Talking about total imports, Minawala said, even as the prices have touched rock bottom at around Rs 26,000 per 10 grams, the imports are well under control and would not be more than USD 26 billion this financial year.
Already USD 24 billion gold imports have taken place. In 2013-14, India imported around USD 35 billion worth gold, Minawala added.
GJF represents over 6,00,000 players comprising manufacturers, wholesalers, retailers, distributors, laboratories, gemologists, designers and allied services to the domestic gems and jewellery industry.
