Jewelry traders across India have gone on a one-day strike on Friday to protest against the 2% excise duty imposed on branded jewelry.
Traders said the tax will deter consumers from purchasing jewelry, India’s Financial Express publication reports. According to traders, the excise duty will throttle the growth of the branded jewelry business. At the same time, it will put unnecessary burden on consumers.
Across the country, 18 associations of gold and diamond studded jewelry manufacturers and retailers have come together to form an association to oppose the excise tax levied upon by the finance minister for the branded jewelry segment.
“All our counters will remain shut on that day. Every state will have one representative who will visit the FM and present our (jewelers) case to him and also outlay the nuisance value attached to this Law,” said Uday Nanavati, director, Ace Jewels, in a release.
“Such a duty will adversely impact the business of home-grown brands like ours,” said a Mumbai-based jeweler. Traders feel if the excise duty is imposed on branded jewelry, it would lead to a situation wherein the same piece would be taxed repeatedly, every time the jewelry is converted into some other form or design.
“The logo or name of the jeweler is marked on the piece of jewelry, whether it is made out of raw bullion or re-converted into some new form or design from the existing jewelry,” said Mukul Sonawala, president of Bombay Bullion Association.
He pointed out that an attempt to levy a 2% excise duty on branded jewelry would result in taxing the country’s wealth, given the fact that Indian households hold a sizeable amount of jewelry in the world.