Gem and jewellery industry stare at Rs2,400 crore loss

The Gem and Jewellery industry is likely to suffer a loss of Rs2400 crore following the three-day strike called by various association of the industry to protest the Centre's new taxes on the industry.

The taxes were announced in the Union Budget. Interestingly it is not the hike in customs duty but the announcement of excise duty that has got the industry worried.

Meanwhile, representatives of jewellers from across the state and the country will soon be meeting with top ministers and bureaucrats in Delhi to represent their problems concerning the new taxes imposed on the industry.

Gujarat alone accounts for Rs1200 crore of turnover per day. In this industry, every city has a different week-off. So considering Sunday as a week-off we are still staring at loss of two days of turnover, said Manoj Soni of AB Jewels

Shanti Patel, president of Gem and Jewellery Trade Council of India said on Tuesday they will decided the future course of action.
"Representatives of our association will meet the concerned minister and bureaucrats to represent our case and the problems that the industry is likely to face due to the new taxes," said Shanti Patel, president of Gem & Jewellery Trade Council of India.

He said more than the customs duty, it was the excise duty that was worrisome as the industry feared that the new provisions will give rise to the dreaded 'Inspector Raj'.

"Unlike other industries where a product is manufactured at one place and excise is charged on it we have to send our products to different places to get various work done on it. It will be difficult to maintain the paper work for all of it when the taxman comes calling," said Patel.

Explaining it further, Soni said the new taxes will kill the industry and will also lead to more evasion of taxes.

"When a car is manufactured it is done so at one place. In our industry a chain will be manufactured at one place, a pendant at other place and a third person will put them together at a third place. So how do we maintain the paper work for all this? How do we show it in our book of accounts and how will the excise be charged of it. We will end up needing an entirely new workforce to maintain it as most of the workers who manufacture these products are illiterate," said Soni.

Over 3,000 jewellers from the city and some 5,000 from Surat too had joined the state-wide bandh.