Andhra Pradesh

Jewellery shops closed for three days

By Our Special Correspondent

Jewellers observing bandh in the twin cities to register their protest against tax on branded jewellery in the recent budget. - Photo: Mohd. Yousuf

HYDERABAD, MARCH 3. The official interpretation of `branded jewellery' for collection of the newly introduced two per cent tax led to protests by jewellery shop owners, who announced a three-day closure of shops from Thursday.

The jewellery shop owners are worried because all the ornaments they sell have some etching of initials of the goldsmith or the shop. The initials or any markings are intended to serve as an in-house check mechanism to identify where the ornament was made or sold.

But the hitch now is that the officially "branded jewellery" is defined as an ornament which has "a name or a mark, such as a symbol, monogram, label, signature or invented words or any writing" on the ornament. Central Excise officials have already instructed the shop owners to collect the tax on all ornaments sold.

Identification easy

"Every ornament in any shop has some sort of an engraving. But that is only to help us identify the ornament and also to instil confidence in the customer that he can come back to us for resale or repair later. Branded jewellery means ornaments sold under a brand name. We do not do that and yet the tax is sought to be collected. This is unfair," argues Hari Kishan Gupta, president of the Twin Cities Jewellers Association.

Jewellers are worried that the imposition of two per cent tax would lead to a drop in sales.

The possibility of removing all the etchings of initials is also remote as the customers would be unwilling to buy such ornaments. "The etching would serve as a guarantee for the customer to prove that the ornament was bought from a particular shop. Without that they would not buy," another jeweller explains.

Clarification sought

They feel that the official machinery took a dictionary meaning of the word `branded,' while interpreting the Union Finance Minister's announcement on the new tax.

They said that the Government should clarify on the definition of `branded jewellery.'

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