Kerala government's move forces bulk purchasers to head for other states. |
The Kerala government’s Budget decision to hike tax on gold ornaments to 4 per cent from the earlier 1 per cent has thrown a wet blanket over the season of joy for gold jewellery shop owners. |
Usually during this season – the Onam festival and wedding time – they hear their cash registers ring loudly, but they are a worried lot, today. |
Earlier, Kerala’s jewellers used to earn a lot from the purchases of bulk buyers. But, the state’s gold buyers are currently shunning local outlets and are making a beeline for neighbouring states’ lower-priced offerings. |
And, indeed, they are saving a lot on the costs in the process. |
“Of late, there has been a rise in demand and investment prospects for gold. However, the tax hike has come as a jolt. Bulk buyers, who shop during marriages and Onam, are increasingly heading for Chennai and Bangalore,” said Ramesh Pai of Kochi-based Geeri Pai Jewellers. |
While there are big- to medium-size jewellery shops dotting the length and breadth of the state, Kochi, given its large number of gold shops, has greater potential to emerge as a trade hub for the precious metal, in south India. |
K R Bijimon, general manager, Muthoot Finance, said, “Keralites are fond of gold, as it is a great investment option. The government’s move to increase the tax will affect the state’s gold industry.” |
Echoing a similar view, Pai said, “The Budget proposal has brought gold on par with luxury items, while the fact remains that it can never be seen as a luxury item. It is a big investment option for the buyer, on the contrary.” |
With travelling expenses tumbling, Kerala’s bulk purchasers seem to be quite willing to go to other southern states to buy gold and, thereby, save a substantial amount. |
Pai blamed it on the inability of the jewellers’ association of Kerala to “convince the government of our plight”. |
In the circumstances, the state jewellers are considering setting up outlets in cities such as Chennai and Bangalore, which, they feel, will help cushion the impact of the tax hike. |
Statistics
SUPPORT (183 Members) . GROW (7 Association). PROMOTE (Visitors from 14 Countries).
(Check The Site's Statistics)
Sunday, September 03, 2006
Tax hike puts wet blanket over gold buyers` joy
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment