Jewellers, bullion traders reopen shops after 5-day strike

After five days of protests on the the 1% hike in excise duty on gold and doubling of customs duty on unbranded jewellery announced in the Union Budget, bullion traders and jewellers reopened shops on Thursday, reports said. The country was losing Rs. 10bn daily due to the nationwide strike and is the first since 2005, reports said earlier. The strike was called by the All India Gems and Jewellery Federation on Mar 17. Finance Minister Pranab Mukherjee in Union Budget on Friday proposed doubling the customs duty on gold to 4% and imposing an excise duty on unbranded jewellery of 1%. Traders fear that the move would adversely affect the small businesses but benefit the big players. Jewellers were of the opinion that the new taxes would lead to various complications with regard to goldsmiths, manufacturers, wholesale businessmen and retailers, reports said. According to reports, small artisans who design jewellery for goldsmiths would not be subject to the hassle of registration for duty payment. Industry bodies believe that demand would take a severe hit. Bachhraj Bamalwa, Chairman of the All India Gems & Jewellery Trade Federation expects a decline of 40-50% in purchases due to higher prices. Reports state that the government has imposed and increased these duties to bridge the current account deficit gap, partly fuelled by record bullion imports last year. The jewellers’ group will continue to lobby the government to withdraw the levy on non-branded gold jewellery, reports said citing Bamalwa.