GST pulls production down by 50 per cent, reduces jewellery sale by 30 per cent
By L Rajagopal | Express News Service | Published: 14th August 2017 01:09 AM |
COIMBATORE: THE implementation of GST has seriously affected gold jewellery industry here, with manufacturing falling to 50 kg from 100 kg a day and sales by 30 per cent, according to Coimbatore Jewellery Manufacturers Association president B Muthu Venkatraman.
This has affected the livelihood of 55,000 goldsmiths in the city. They now have work only for 18 days a month, though Coimbatore is well-known for jewellery manufacturing.
“Jewellery made in the city is supplied to places across India and to foreign countries, especially in the Middle East. Quality, purity and trust are the reasons behind our success,” he said.
But now, the craze for jewellery among women is the main reason that the industry continues to survive, say sources in the industry. Despite the tremendous changes in lifestyles, wearing gold ornaments is still considered the best way to show one’s economic status.
“Before the GST was put in place, the tax was one per cent for turnovers up to `10 crore and 2 per cent above it. Now, gold biscuits, gold and silver jewellery, diamonds, stones are taxed at 3 per cent. The increase has affected manufacturing and sale across the entire industry,” said Muthu Venkatraman.
Normally, a minimum of 100 kg of gold jewellery is made here per day. Now it has fallen to 50 kg. Also, the average sale was `12 crore per day. Now it has fallen by 30 per cent, he said.
Price hikes, whether low or high, affects sales. Initially consumers will postpone a purchase and then drop the plan entirely. This affects the entire industry. So, the tax rate should be reduced to 1.5 per cent and the exemption raised to a turnover of `10 crore. “We all welcome GST. The high rates are not the only problem. Under GST, the jewellery for displays is also taxed, which is unfortunate as we regularly participate in expos in various districts. There are many problems like this,” he said.
The 35 jewellery manufacturers have urged the GST Council to consider their demands, which will help the industry to grow across the country.