The Indian jewelry industry has raised concerns over the government’s decision to require the use of PAN (a permanent account number code that acts as identification of Indians, especially those who pay income tax) cards for any transaction of Rs 200,000 ($3,014) and above.
The industry fears that the change will further reduce the number of people buying jewelry once the change, planned for January 1, 2016, comes into effect.
The government says the move is necessary to try to control the amount of “black money” in the system. However, All India Gems and Jewellery Trade Federation (GJF) director Bachhraj Bamalwa told The Economic Times that the gem and jewelry sector was not the generator of black money. “More than 80 percent of the value of jewelry is raw materials like gold and silver which are legitimately imported in the country."
GJF chairman G V Sreedhar told the Times of India that the decision would discriminate against 70 percent of rural buyers, including farmers, as they fall under the minimum income level for paying tax and consequently do not have PAN cards.
He pointed out that targeting the gem and jewelry sector does not get to the heart of the problem. “We urge the government to remove [the PAN] card requirement in the jewelry sector and to maintain the status-quo on the application of TCS [tax collection at source] on sales of bullion of Rs 200,000 ($3,014) and of Rs 500,000 ($7,537) of jewely,” he said, as reported by The Economic Times.