India Jewellers Rally Against Import Tax Hike

Gold jewellers are protesting across India, demanding a rollback of the hike in excise duty on unbranded jewellery and the import tax on gold, as proposed in the recent budget.

Indian jewellers went on strike a day after the federal budget was announced on March 16.

For the last two weeks, they have been protesting against a proposal to levy a 0.3 per cent excise duty on unbranded jewellery, and double the import tax on gold bars to four per cent of value.

Jeweller Matadin Sodhi said: "Our business is wholesale and gold and due to good turnover, the government earns a good amount of revenue.

"Our business is shut down for the last few days. Even on Mar. 30, 2012, the whole market is closed. This shutdown has adversely affected our turnover and income."

Most jewellery shops in hubs like western Maharashtra and Gujarat states are planning to remain shut till March 31.

Meanwhile, the lobby group, All India Gems & Jewellery Trade Federation, is trying to negotiate with Finance Minister Pranab Mukherjee.

Jeweller Hiren Parekh said: "Everybody is expecting Pranab Mukherjee to give us some final result regarding this.

"If he is stubborn, we are more stubborn than he. He is sitting in a chamber, we are here sitting under the open sky. We are not going to release this movement without any means."

Now, it seems, the government could be giving in some ground, with the finance minister saying he may reconsider his proposal to tax unbranded jewellery.

But he remains firm on his decision to raise import tax on gold.

With an annual consumption close to 900 tonnes, India is the world's biggest buyer of the yellow metal.

Gold jewellery forms an integral part of Indian weddings and many daily-wage workers are also dependent on the industry.

The protest has severely hit gold imports and in the last 10 days, the industry has incurred a loss of around US$315 million.