Countrywide Strikes by Indian Jewelry Retailers Over Excise Duty Proposal

(IDEX Online News) - The Indian jewelry retail sector has been outraged over the recently announced budget proposals that have called for a 1 percent excise duty on all unbranded jewelry. Until now, only branded jewelry has had to pay this duty. The industry fears it will undergo official harassment over the valuation of all the jewelry it sells.

The All India Gem & Jewellery Trade Federation (GJF), a body representing jewelry retailers across India, had called for a three-day strike immediately after the budget announcement and then extended it by another two days due to pressure from its membership.

Subsequently, however, when a GJF delegation went to Delhi to represent the industry’s case to the government, it was asked to withdraw the threat before any negotiations could take place.

The GJF immediately called off its strike in order to make its case with the Finance Minister.

Local jewelry retail associations across the country, however, refused to sit quiet and agitations have been ongoing in almost every geographic location of the country with the exception of the southern markets.

With no results from the government meetings, the GJF embarked on a lobbying campaign with Members of Parliament of every political persuasion. Ruling and opposition party MPs haves subsequently raised the issue in both houses of Parliament.

Meanwhile, the Gem & Jewellery Export Promotion Council (GJEPC), the quasi-government body that represents the export production industry has put out a press release expressing “dismay” at the 1 percent excise duty proposal.

The GJEPC said it supports the GJF and all the other associations across the country in their demand for a rollback of the excise duty proposal.

It also said that the budget proposal to double the import duty on gold has left the entire jewelry industry of India and the 3.5 million people it directly employs uncertain about the future. GJEPC Chairman Rajiv Jain repeated the fears he had expressed earlier that the increase in import duty could lead to a rise in gold smuggling.

The GJEPC noted that excise duty is an ambiguous regulation and is difficult for small- and mid-size retailers to deal with. The jewelry retail industry, the GJEPC said, was willing to contribute to the Indian government’s revenues through any other avenue rather than excise duty.