Imposition of Pan Card restrictions discriminate 70% of the rural buyers of Jewellery
The Regional Chairman and Member, Board of Directors of All India Gems and Jewellery Trade Federation (GJF) Nitin Khandelwal while addressing a press meet said that the All India Gems and Jewellery Trade Federation (GJF), the National Trade Federation for the promotion and growth of Trade in Gems and Jewellery (G&J) Industry across India, has expressed disappointment over Pan Card rule for transaction over Rs 1 lakh which will be discriminating the 70% of the rural buyers of jewellery as they are not under the tax net and do not have Pan cards.
According to Khandelwal, India has a population of over 125 crores. Of this only 14 crore people have Pan Cards. He claimed that only 2.5 crores pay Income Tax. He added that this means that 89% do not have a Pan Card or 11.2% have Pan Cards.
Khandelwal claimed that everybody knows that India is an Agro-based Country and that 70% of our population lives in the rural areas. The strict rule of mention of Pan Card on any transaction over Rs 1 lakh is discriminating the rural populace from buying jewellery.
Khandelwal claimed that the government brings about many changes or amends many laws and rules which we are not aware of and do not realize the implications immediately.
He claimed that Finance Minister Arun Jaitley while presenting the Union Budget has made all the provisions and laws that are for five years instead of the usual one year. However, some of the rules are not practical.
He added that 90% of the jewellery buyers are women or house-wives. These women save money and after saving a significant amount go to buy jewellery. This jewellery often comes to the aid in times of Medical and other financial emergencies. However, these women do not have any Pan Card.
With the imposition of this law, the domestic customers are travelling abroad to buy jewellery where they get a lot of discounts and tax exemptions. Khandelwal opined that this will give rise to smuggling. People will slowly shift from handmade jewellery to machine made jewellery. This in-turn will render a bleak future for the jewelers and their families.
According to Khandelwal, this rule will adversely affect the organized players who adhere to the laws and rules of the land. He claimed that Gold is usually considered best in times of emergency. The unorganized players who constitute nearly 80% of the Jewellery traders will benefit from this rule since the organized players will insist on the Pan Card. This will also gives rise to Income Tax violations and a parallel economy to rise.
Inclusion of Jewellers into Anti-Money Laundering Act
Another problematic law that has come to fore, is the inclusion of Jewellers into Anti-Money Laundering Act which is made with 40 countries with whom we have signed a treaty. The Indian Jewellery Industry does not accept this Act.
Such kinds of Acts are discouraging new players from entering the industry. While claiming that the Government efforts are good, Khandelwal said that only the time is not right. Such Acts should be brought about in stages after laying the ground work and making all due preparations before enacting an Act.
Khandelwal claimed that there are 6 lakh players in the Jewellery Industry which gives employment opportunities to around 2 crore employees.
Khandelwal claimed that according to the survey report of the World Gold Council, around 6.5 crore marriages will be held this year in India alone. Such an Act will deter the buyers of gold from the organized players. In 2014 the jewellery industry made business worth Rs 3 lakh crores approximately.
Khandelwal also claimed that around 25000 Tons of (idle) gold are lying unused in people’s houses. If the government can buy it or procure it from the citizens for a certain monitory benefit, there will be no need for us to import gold from other countries.
Other dignitaries who addressed the press meet included Secretary Nagpur Sarafa Katkoria, President –MSSM (Vidarbha) Rajesh Rokde, Governing Board of Director, GJF Purushottam Kawle, Governing Board of Director, GJF Pradeep Kothari, Governing Board of Director and GJF Rajendra Seth.
GJF welcomes the progressive and pragmatic Union Budget presented by the Finance Minister and it sees the Union Budget as an extension of several positive initiatives taken by the Union Government since taking charge. It is the change in attitude of the Government towards the gems and jewellery sector and the proactive Government measures of introducing the gold monetising scheme and indigenous manufacturing of gold coins with symbol of Ashoka Chakra. Gold monetisation scheme should offer opportunity for inclusive growth of sector which includes banks, jewellers, refiners and traders. It is expected that the National Skilling Mission will take up the challenge of enhancing skills of over 2 crore people in the gems and jewellery sector as well as encourage youth entrepreneurs to enter the business.
The All India Gems and Jewellery Trade Federation (GJF) represents over 6,00,000 players comprising manufacturers, wholesalers, retailers, distributors, laboratories, gemologists, designers and allied services to the domestic Gems & Jewellery industry. The Gems & Jewellery industry is a hand crafted and labour intensive with over 1 crore strong labour force engaged in the manufacturing of jewellery industry in the domestic sector. The Federation’s mission is to support and promote the progress and prosperity of all the members in the gems and jewellery industry across India. It also provides regular news updated on notifications, rules and regulations declared by the Government. It promotes the trade, by participating in promotional events on a national level. It encourages the trade through the organization of consumer exhibits in India. It also counsels educational and research institutes that help in developing superior quality and high standards for effective functioning of the trade. The gems and gold jewellery business has made significant contribution to the Indian economy and society. The sector has grown phenomenally on the national and international front in the last few years. The industry is in transition phase where family owned entrepreneurial businesses are slowly evolving and transforming into organized professional organizations. Creating a proper policy framework will pave the way for stimulating growth and encouragement.