Business
'Citing PAN number for buying jewellery will lead to gold smuggling'
Kolkata, March 16
The central government's
recent move for compulsory declaration of permanent account number (PAN)
for jewellery purchases of and over Rs.1 lakh will lead to a surge in
smuggling of gold, a section of jewellers said on Monday.
"While
we welcome the centre's initiatives to control black money, we also need
to understand that the compulsory declaration of PAN for jewellery
purchases on and above Rs.1 lakh will increase smuggling," immediate
past president of All India Gems and Jewellery Trade Federation Bachhraj
Bamalwa told media persons here.
He said since the nation has
roughly ten crore PAN cards and the rural population is unaware of it,
customers may be reluctant to declare the card during transaction and go
to "unethical" jewellers for the purchase.
According to Bamalwa,
while the domestic jewellery market entirely comprises the organised
segment who issue proper bills on purchase, the unorganised segment may
come up.
"We need to remember since the transaction will become
illegal if the customers do not provide their PAN card, the gold which
will be used will also be illegal," he said, adding "if you go for
illegal transaction, you will also get gold which is illegally
procured".
The association, representing over 600,000 jewellers
nationally, said 200 tonnes of gold are being illegally imported to
India of which a meagre 0.1 percent has been seized by law enforcement
authorities.
Furthermore, the association's governing board of
director Samar Kumar De said since the housewives do not possess a PAN
card, they may be reluctant to buy the yellow metal.
"In the
present situation, Rs.1 lakh can fetch only 30-35 grams of gold. The
imposition (of PAN card) from the centre is not practical as it will
discriminate 70 percent of the rural buyers as they are not under
(income) tax net and do not have PAN cards," he said.
The trade
body also said it is better for the industry if the import tax on the
precious metal is reduced from the current 10 percent to two percent.
"We
had a meeting with the commerce minister on this and she was also of
the same view. We expected this to happen in the budget, but are
disappointed," Bamalwa said.
Union Finance Minister Arun Jaitley,
presenting the budget for 2015-16 last month, had made declaration of
PAN number mandatory for jewellery purchases.