The imposition of 2.5 percent additional import duty on the gold announced in the Union Budget on Friday has evoked strong criticism from jewellers in Kashmir, who says the move will bring slump in the sales of yellow metal during the ongoing marriage season.
Jewellers, who are worried due to gold market going through a slump due to volatility in prices, have demanded immediate roll back of the duty hike.
Union Finance Minister Nirmala Sitharaman in her maiden budget speech on Friday proposed to increase custom duty on gold and other precious metals from 10 percent to 12.5 percent.
However, local jewellers who after 1 percent excise duty hike in 2016 Union Budget had followed an All-India strike for more than a week say they will follow “whatever programme is announced by national level umbrella body of the jewellers against the duty hike”.
Talking to Greater Kashmir, Bashir Ahmad Rather, president of All Kashmir Gold Dealers and Workers Association said the increase in import duty along with global reasons is pushing prices of gold up, adversely affecting the market.
“Gold prices have already been sky-rocketing due to several reasons. The trends in global markets such as central banks hoarding the metal at fast rates, geo-political situation in Middle East, purchase of gold as an asset class for investments also continue to push gold prices up,” Rather said.
Rather said All India Gems and Jewellery Association has also opposed the hike in duty adding that “it is a draconian move to finish the jewellery industry once for all”. Interestingly, the custom duty which was increased by the central government in 2016 Union Budget had also witnessed prices of the yellow metal jump abruptly resulting in gold market slowdown for several months across the country.
Bahauddin Zargar, president, Kashmir Gold Jewellers Association (Anjumani-Zargaraan), which has a large number of members from gold market hub of Saraf Kadal in Downtown, Srinagar, said apart from goldsmiths, thousands of workers who do polishing of ornaments and gold units in Srinagar and other districts of the Valley will also be hit by the import duty hike as sales which already have been abysmal will be further hit.
“Bulk of the population in Kashmir is busy with the marriage season and has been making purchase queries with us. We will lose a large clientele in case the duty increase is not rolled back as anyways Gold market is down,” Zargar said.
Meanwhile, prospective Gold buyers say they will hold back their decision of purchasing the Yellow metal for the time being till prices stabilise. “My sister’s wedding is scheduled for October and we had to purchase some ornaments in addition to what we have shopped for. But now we will wait and watch the market trends before making bulk buying of Gold,” said a customer Shazia.