Indians who have been visiting local jewellers in the past two days have good reason to worry. Post the Prime Minister's declaration on Tuesday that Rs 500 and Rs 1,000 notes will be taken out of circulation, officials have been training guns on the jewellery trade.
Sources in the Finance ministry have told DNA that the government is asking all jewellery stores across the country to send in CCTV camera footage from the night of November 8 onwards. The directive for the CCTV footage has come from the office of the Revenue Secretary, and it along with the I-T department, will take action against errant jewellers.
In the CCTV footage, I-T sleuths will look for customer movement in shops since 8pm on November 8, focussing on how many people came to a particular shop, whether a person made multiple trips to a particular or several jewellery shops, and if different members of the same family went jewellery-shopping. The police have been informed in several states, and the government consciously did not announce it during the press conference that was held on Wednesday.
Already, action is being taken against jewellers. Raids were carried out across the country on Thursday after multiple complaints were registered against those suspected of hoarding black money. The I-T department cracked down on money launderers and jewellers, and in the Capital, raids were carried out in several popular locations for jewellery like Karol Bagh, Dariba Kalan and Chandni Chowk. In Mumbai, three popular trading hubs, including the well known Jhaveri Bazaar, were raided. Sources said that Chandigarh, Ludhiana, Amritsar, Jalandhar, Kolkata and Ahmedabad were also some of the cities raided. They added that such raids will continue over the next few days.
I-T officials said that the raids followed directives from the Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra on Wednesday to all investigative units to track down any form of illegal cash transaction. Officials also said that the government's clear directive is that any illegal cash movement will be dealt with an iron hand. On Wednesday, the government announced that people will need to furnish their PAN numbers to buy jewellery.
The price of gold bullion has also seen a steep rise of over 60% since the PM's announcement. People thronged jewellery shops across the country, spiking demand for gold bullion across the country. In several areas, jewellery shops did good business through the night. The opening rate of gold bullion on Wednesday was Rs 35,000 for 10 grams, and closed at Rs 49,000. On Thursday, gold prices opened at Rs 49,000 and soared to Rs 55,000.
The trouble for the jewellery trade is that November 8 was a good night for sales. In Mumbai, Jhaveri Bazaar was open till late in the night on November 8. The Capital, too, saw record-breaking sales on the day. Dariba Kalan and Chandni Chowk are some of Delhi's oldest jewellery hubs, and among the narrow alleys of the area, several traders sell a variety of jewellery here -- imitation, silver, gold and diamond. Along with Karol Bagh, these markets are the hot spots for those shopping for wedding jewellery.
The standard charge levied on the making of gold jewellery in Delhi is 30%, while on diamond jewellery, it is 15%. In Old Delhi, however, charges are usually 10-15% cheaper for gold and around 5% for diamonds.
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