Thiruvananthapuram News

Kerala Jewellers’ memo to repeal purchase tax

Jewellers submitted a memorandum to Finance Minister to repeal purchase tax in the upcoming budget.

Published: 01st March 2017 06:50 AM  |   Last Updated: 01st March 2017 06:50 AM   |  A+A-

By Express News Service

THIRUVANANTHAPURAM: Jewellers submitted a memorandum to Finance Minister to repeal purchase tax in the upcoming budget. Kerala jewellers association co-ordination committee met legislators on Tuesday and presented their case for doing away with purchase tax.

According to them, the tax was introduced during the previous UDF Government by mistake and it had led to heavy burden on gold buyers and sellers.

“Purchase tax over and above compound tax was a mistake and it was debated in the Assembly. But it was not repealed due to political reasons. We do hope that a change will be made in this year’s budget,” said coordinator of KJACC S Abdul Nazar.

According to KJACC convenor A M P Ahammed, the multiple taxation was huge burden on customers.

When a customer buys 1 sovereign gold he or she will have to pay Rs 5,000 more as tax, and when the same gold is sold again the customer loses Rs 1,250.

Ahammed said purchase tax a form of double taxation should not have been included in a commodity like gold. He said the introduction of purchasing tax was the reason for the spurt in gold smuggling cases.

“Heavy taxation compels many merchants to dodge tax and they would be able to sell gold to customers at a better margin. At the same time, a merchant who passes on the tax burden to customer stands to lose business. It creates an unhealthy trend,” said Ahammed.

Member of KJACC T S Kalyana Raman said the gold business was increasingly going to the unorganised sector. According to him, it was a strange demand from state to ask for 6 per   cent gold jewellery under GST, while the other states were keen on fixing it at 1 pc. Kalayana Raman said business has been heavily affected by taxation.

According to KJACC, the industry pays a tax of Rs 600 crore. The organisation has been critical of the unlawful inspections by sales tax and officials of Comptroller and Auditor General.

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