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Saturday, Jun 01, 2002

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Luxury tax on jewellery awaits TN gazette notification

L.N. Revathy


A GAZETTE notification is awaited on the proposed levy of luxury tax on gold, silver, platinum jewellery and precious stones in Tamil Nadu.

The Tamil Nadu Legislative Assembly has passed the TN Tax on Luxuries Amendment Act 2002 on May 10. The amendment would become effective from the date of publication in the gazette, which is expected at any moment.

The amendment provides for an additional levy of 1.5 per cent on the sale of ornaments made of precious metals and stones.

The jewellery trade apprehends that this multiple tax levy would affect business in the State. It is reliably learnt that some renowned houses have started to divert their business by establishing their presence in neighbouring States, as the tax imposed in the other parts of the country is uniform at one per cent.

The reported bullion offtake (in Coimbatore) during the last year has stood at around Rs 70 crore. But the jewellery trade is said to have remitted a turnover tax for a much lesser value.

"There is a total mismatch in the offtake and turnover," sources told this correspondent.

The price has moved up from around $264 per tri-ounce in April last to close to $325/tri-ounce now.

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