Cracks have developed between jewellers and bullion dealers over differences of opinion on the sale of gold bars.
The differences of opinion started when Ashok Minawala, director of All India Gems and Jewellery Trade Federation, said traders were ready to stop selling gold bars in lieu of a rollback of one per cent excise duty as proposed in Budget 2016-17.
“We have already stopped sale of bullions, including coins and bars a couple of years ago, when the government was facing huge crisis with widening the current account deficit.
"So, we can do the same thing once again.
"Since gold import declined when we stopped sale of bullions in the past, we are sure it would decline even now if we stop selling bullions.
"This offer, however, would be periodic,” said Minawala.
This proposal irked India Bullion and Jewellers Association, which termed Minawala’s offer 'baseless' and 'confusing'.
IBJA, along with another body Mumbai Wholesalers Gold Jewellers Association, has convened a mass protest rally at Azad Maidan in Mumbai on Wednesday against the government’s proposal of excise duty.
Since the Union Budget was present in Parliament on February 29, jewellers and bullion dealers have been protesting against the government’s move to levy one per cent of excise duty on the sale of ornaments made of gold.
On various platforms, all these industry players have unanimously submitted representations to Finance Minister Arun Jaitley, other Cabinet ministers and bureaucrats.
But, the government has not given any concrete assurance on the rollback of excise duty.
Notably, IBJA asked the government to raise one per cent import duty in place of excise duty.
“While IBJA and other trade organisations are not against the government, they are against the ‘inspector raj’ of the excise authorities,” said Surandra Mehta, secretary, IBJA.
According to Minawala, the decision of halting bullion sales was decided in a recent meeting of representatives of around 250 associations across the country where IBJA was not present.
“IBJA, therefore, must have misunderstood our proposal which they say is confusing. Since the meeting was attended by 300,000 jewellers across the country, there is no confusion in our proposal,” said Minawala.
“How will gold import come down if jewellers stop selling bullions? ” asked Mehta.
Meanwhile, they are united in opposing the proposed excise duty levy. Members of both the bodies have shut down their shutters indefinitely since March 2.
“The industry is not against contributing one per cent revenue to the government.
"But, the excise on jewellery is a regressive step taking us back to the days of gold control and inspector raj.
"It will only increase paperwork and take away our time from creativity,” said Ishu Datwani, founder, Anmol Jewellers.
The image is used for representational purpose only. Photograph: Reuters