GJF Calls for Indefinite Bandh

On the eve of their meeting with the Finance Minister on March 6th, senior leaders of the GJF declared at a Press Conference in Mumbai that the ongoing bandh of the jewellery industry would continue indefinitely till there was a full roll back of the excise duty recently imposed by the government.

Chairman of the GJF, Bachhraj Bamalwa outlined the various points of the Union Budget to which the jewellery industry has objections: the 1% excise duty; the increase of customs duty on precious metal, particularly gold from 2% to 4%; and the TDS norms imposed for cash transactions above Rs. 2,00,000.

“The excise duty is a big problem,” Bamalwa stated. “Though we are not against the duty as such the government does not recognize that the nature of jewellery manufacture is extremely complicated, and it involves a large number of artisans who have the skill but are not necessarily literate. There is no way that this excise duty requirements can be implemented.”

Bamalwa claimed that if this excise duty was imposed, it was possible that a large number of self-employed artisants would be driven out of the industry. This threatened not only the destruction of skills built up over generations and centuries, but also the very livelihood of several crores of artisans, and including their dependants, the numbers would be anywhere up to 68 crores. “The self employed artisans are not even getting any support from the government and yet their very livelihood is threatened,” he said.

He raised two more bogeys likely to haunt the industry – internally there was the possibility of the revival of “inspector raj”, and externally, he said there were countries like China just waiting for something like this to happen so that they could fill the vacuum and gain the upper hand in jewellery manufacture.

Ashok Minawala, former chairman and a founder of the GJF explained in detail the problems faced by the industry, and the muddling manner in which the laws had been formulated. “In 2005, the government introduced a levy on branded jewellery, which comprises about two to three per cent of the industry, but the nature of the notification was such as to make it applicable to the entire jewellery industry,” he said. “After intervention by the GJF, the then Finance Minister took back the contentious portion of the notification. However, in the 2011 budget, a one per cent duty was imposed supposedly on branded jewellery but with a similar ambiguity in wording and once again the entire industry was brought within the ambit of the levy. We have been fighting for its removal and after one year we were notified that the rest of the industry was exempt from this duty only on March 2. But a few weeks later this year’s Budget, once again has introduced the excise duty and once again the entire industry is within its ambit.”

The leaders announced Maha Rally on April 11th at Delhi and one on April 7th in Mumbai.

However, the GJF leaders were hoping that the government would listen to reason. While they were willing to negotiate on the other two points of dispute, they made it clear that there was absolutely no way they would concede ground on the excise duty issue.