The All India Gems and Jewellery Federation (GJF) fears that the Union government decision through the 2015-2016 Budget mandating the PAN card for all transactions on jewellery purchase above Rs.1 lakh will have an adverse effect on the industry.
According to a statement from GJF national council member S. Abdul Nazar, the GJF and various State-level organisations of gold traders has already petitioned before the Prime Minister and the Finance Minister in this connection.
Lesser sales
The proposal making PAN card mandatory will prevent a sizeable number of people, especially the rural community, from buying jewellery.
This will lead to lower sales and slow down in manufacturing.
Moreover, exchange of old jewellery for new ones is a common practice in the industry and the new norm will have a crippling effect on such transactions.
The rule will also hamper the GJF efforts to organise the jewellery trade sector.
Non-compliance
A large number of industry constituents may resort to non-compliance for survival.
Black money
The fallout may lead to parallel sales, aggravating the problem of black money and a corresponding fall in VAT and Income Tax revenues for the government, Mr. Nazar said.
