Author: Paul Ploumis

 

10 Apr 2015 Last updated at 08:20:43 GMT

 

MUMBAI (Scrap Monster): Indian jewellers have expressed strong opposition to government’s proposal, making it mandatory to produce Permanent Account Number (PAN) card details for gold purchases exceeding 1 lakh. Commenting on the issue, Bhaskar Bhat, Managing Director, Titan Company Limited stated that imposition of such regulation would affect genuine gold deals. Instead, he requested the government to hike the existing threshold of Rs 5 lakhs to as high as Rs 10 lakhs.

 

According to Bhat, out of 170 million PAN card holders in the country, only 30 million come under the income tax net. The new rule will create fear among the good majority of non-tax paying card holders. They fear that submission of PAN card details during gold purchases would reveal their identity to income tax authorities. The government is likely to lose huge revenues in terms of Value Added Tax (VAT) collected on gold bills, he added. Recently, All India Gems and Jewellery Trade Federation (GJF) had expressed opposition to the government proposal saying that the new rule would discriminate 70% of the rural buyers as most of them do not even have a PAN Card.

 

Another issue in the offing is the anticipated drift of consumers towards small jewellers. Customers may get attracted towards small jewellers who are willing to break the Rs 1 lakh bill into two bills of Rs 50,000 each in order to help the customers get away with PAN requirement. However, Bhat stated that customers are found to buy gold from trusted sources. Hence large companies like Titan is unlikely to lose market share as a result of the government’s new proposal.

 

The company stated that they are yet to start operating on the decision as they are yet to receive any official gazette notification. It urged the government that increasing the threshold limit to Rs 10 lakhs would be a more practical decision.