The Maharashtra Government has decided to marginally increase the value-added tax on gold, silver and diamond jewellery. Besides, it has also slapped a four percentage point hike in equipment to manufacture jewellery.

The move has irked jewellers and the bullion community alike.

Maharashtra Finance Minister Ajit Pawar in the State budget for the next fiscal has increased the value-added tax from 1 per cent to 1.10 per cent. The tax on the equipment and tools required to manufacture the jewellery has been raised from one to five per cent.

Mohit Kamboj, President of the Bombay Bullion Association, said that any increase in VAT on jewellery and equipment for making the jewellery will affect the end consumer, “Although the increase from one to 1.10 per cent is not significant, the tax will ultimately have to come from buyers pockets,” he said.

Kamboj said that since Mumbai has a huge jewellery trade, the State Government is set to get good revenue from the new tax proposal.

Mehul Chocksi, Chairman and Managing Director of Gitanjali Jewels, said that while the Government wants to promote manufacturing activity on the one hand, it is levying new taxes on equipment. Such policies are not in the right direction, he said.

Suresh Hundiya, a member of the Bombay Bullion Association, said that the additional levy on gold and jewels was not significant, but consumers would end up paying a higher price.

rahul.wadke@thehindu.co.in

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