‘Inspector raj’ haunts as gold jewellers intensify strike

There's fear in the air that bad 'ol days of smuggling and 'Inspector-Raj' may do a comeback following increase in import duty and introduction of excise duty on gold and gold ornaments, respectively.

The newly-introduced import duty has made gold dearer up to Rs12,000 per 100 gram and Rs1.20 lakh per kg. This, the gold dealers and ornament sellers fear may be the leading factor towards turning the clock to those days of early 80's when large-scale smuggling of gold happened due to rise in the import duty.

Trading of more then one kilogramme is routine for gold trading business nowadays and cheaper gold without paying duty would be a lucrative business for gold dealers in the emerging scene.

"Rise in gold import duty will put more burden on consumers and will also bring in the threat of smuggling," said Rohit Zaveri, an office bearer of jewellers association, A’bad. "Gold without paying import duty would be a profit-making business for gold dealers. However, honest jewellers will have to suffer from it as they will have to sale gold in the same high price like illegally smuggled gold."

With excise duty imposed on gold jewellery, another threat that looms large over the industry is that of rampant corruption. "We have no problem about the introduction of the excise duty but its procedure is very complicated and impractical and jewellers cannot maintain all records," said PS Langlalia, ex-supdt, central excise and customs department and a goldsmith leader. He further said, "We just want the government to roll back the complicated procedure as the business of gold ornaments and its manufacturing is very different from other trades. It should make the procedure easy and simple. So, the jewellers can make business easily," he said. "The existing procedure would invite corruption only," he added.

Branded stores to remain open
Branded jewellery stores as well the ones associated with corporate companies on Shivranjini Crossroads, CG Roads and other parts of the city will, however, remain open. The jewellers association which has called indefinite strike is not even expecting the branded stores to join the industry in its protest against the hike. Union finance minister Pranab Mukherjee has proposed 0.30% excise duty on jewellery this year while on branded jewellery he introduced and levied 1% excise duty. "There are various reasons of branded jewellery stores not joining us. Excluding them, we are more than enough to protest against the hike," said secretary of Gujarat Jewellers Association, Haru Zaveri.