The All-India Gems and Jewellery Federation (GJF) has made a representation to the Central government seeking that PAN card be made mandatory on purchases of jewellery over Rs 10 lakh instead of the present Rs 2 lakh.

With just 22.3 crore PAN cards issued in India, the restriction which came into effect from Jan 1, 2016 will divert business to the unorganised sector, encourage smuggling and set the industry back by 20 years, G V Sreedhar, Chairman, GJF said.

Currently, around 20-25% of the Rs 2.5 lakh crore-strong domestic gems and jewellery industry is organised, as against 2-3% two decades ago. Over 70% of the demand today comes from the rural sector where jewellery is bought both for use as well as a security, Sreedhar said, adding, “Many buyers are women who do not have PAN cards, and they will merely go to a jeweller who does not ask for the card,” he said.

Speaking at the GJF’s buyer-seller meet organised in Pune, GJF functionaries felt that the government needed to differentiate between bullion and jewellery purchases. While bullion is the preferred segment for parking black money, the gems and jewellery segment was not attractive for this purpose as its substantial value addition charges.

Gold monetisation scheme

Speaking on the government gold monetisation scheme that has still not met with any significant success, Ashok Minawala, past chairman of GJF said that the trade body had prepared a proposal to fine tune the original scheme.

“We have designed a scheme by which jewellers who would take the role of collection centres. Around 20,000 jewellers can collect assist in collecting 100 tons in one year, and after this the scheme will just take off,” he said.

The GJF wanted to separate refining and essaying from collection, melting and testing, he said adding that a meeting with the senior officials of the finance ministry was in the offing soon and the fresh proposal would be submitted.

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