PMLA rules to apply to gem & jewellery sector with immediate effect

The provisions of the Prevention of Money-laundering Act (PMLA), 2002, will apply to the gem & jewellery sector with immediate effect, the Centre has said in a notification.

According to the notification, any dealer of precious metals, precious stones, and other high-value goods with a turnover of Rs. 2 crore or more in a financial year will be covered by the Act. The Rs 2-crore limit will be calculated on the basis of the previous year's turnover, according to the notification.

The Directorate General of Goods and Services Tax Intelligence (DGGSTI) will be appointed under the Act to monitor and adjudicate with respect to the gems & jewellery sector.

Issued in the Gazette of India on August 23, the notification has taken the sector by surprise. Sources say the government’s move to apply the provisions of PMLA to the sector is a spillover of income-tax raids on jewellers soon after the government's decision to demonetise high-value currency notes last November. At the time, jewellers had sold gold and jewellery at a huge premium for banned currency notes.

This is yet another step by the government in the past few weeks to stop the misuse and laundering of money. Last Friday, the government had banned gold coins and articles coming from South Korea at zero duty under the Free Trade Agreement. Before that, it had banned the export of jewellery above 22 carats.

Source: Business Standard