Gold merchants and jewellers in India have decided to keep their shops shut indefinitely in protest against an increase in excise duty despite the government’s assurance that it would look into their concerns.
Finance Minister Arun Jaitley announced a 1 percent excise tax on gold in his annual budget presented to parliament last month.
The domestic gold industry, which caters to the insatiable appetite for the metal amongst India, has been up in arms since the announcement, claiming that the additional tax was detrimental to its survival.
The All India Gems and Jewellery Federation (GJF), which represents hundreds of thousands of manufacturers and artisans said the shutters won’t go up until the government rolls the tax back.
The jewellers also want the government to withdraw a rule that requires buyers to declare their income tax details for transactions above 200,000 rupees.
Media reports said the gold and diamond industry is estimated to have already lost Rs 10,000 crore since they struck work on March 2, The industry is estimated at around Rs 3.15 lakh crore with a potential to increase to Rs 5 lakh crore.
India is the second biggest importer of gold in the world and the government, worried over its current account deficit, has been trying hard to curb the appetite by introducing new taxes and push people to bring out a hoard believed to be around 20,000 tonnes stuck in lockers and temples.