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India Tax Changes: One Win, One Defeat for Jewelers
May 25, 2016 6:50 AM
By Rapaport News
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RAPAPORT... The Indian government reversed a decision to broaden the
application of a jewelry tax but is standing by a new stringency requiring more
customers to present identity cards in shops.
Tax collected at source, a 1-percent levy paid by customers,
will only apply to jewelry purchases of $7,422 (INR 500,000) or more, according
to a source at the All India Gems & Jewellery Trade Federation (GJF). This
represents a victory for the GJF, which had campaigned against a move to impose
the duty on all jewelry sales of $2,969 (INR 200,000) or more.
However, new laws requiring customers to present
their permanent account number (PAN) card when making a jewelry purchase of
$2,969 or more will remain in place, the source said. The
government had lowered the threshold last year from $7,422,
prompting protests from the GJF which claimed it would discriminate against a
majority of rural consumers who don’t have a PAN card. The changes were
designed to curb the black market and increase the government’s tax receipts.
The latest decisions follow a jewelers’ strike
in India for about six weeks in a bid to force the government to abolish the 1-percent
excise duty. The walkout ended last month with the levy still in place.
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Tags:
All India Gems & Jewellery Trade Federation, GJF, India, Rapaport News, Strike, tax, tax collected at source, TCS
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