India has almost 2.5 million people who are involved with jewelry industry and the world's largest consumers of gold. This year was a period of revolution as government tax amendments made huge change in Indian economy. Here is the most significant transformation made this year.
GST Bill
This year there were so many modifications made in jewellery sector that began in February when current year’s budget was passed. According to the GST bill an excise of duty of 1% without input tax credit and 12.5% with input tax credit became mandatory for gold, platinum and diamond jewellery with the exception of pure silver jewellery.
The government clarified that the levy of excise duty would be only for jewelers with turnovers over 12 corers. To oppose the excise duty from March 2, the jewelers started a strike that was decided to set off till the 7th of March was extended till 14th of April.
30 days Strike
Jewellery outlets in most of the cities of Rajasthan including Jaipur, Jodhpur and Kota and about 3,000 jewellery shops in Kanpur, Uttar Pradesh remained closed for the rollback of the one per cent excise duty on non-silver jewellery. Indian Jewelers and craftsmen in the industry started a dharna at Jantar Mantar in New Delhi on Monday extending support to the strike call given by different associations in the country. The strike was extended to 34 days. The jewellery industry has been demanding rollback of excise duty hike. The finance ministry has already clarified that the 1 per cent levy will be only for jewelers with turnover of Rs 12 crore and applicable to small traders.
It was also declared that craftsmen and job workers are not covered under this duty and so they so not required taking part in the registration process, paying duty, filing returns or maintaining accounts.
Increase in Export
Exports of gems and jewellery grew by about 10 per cent to $ 23.5 billion during April-November period of the current economic, driven largely by rising demand in India's major export markets like the US and Europe
GJEPC setting up Indian Institute of Gem & Jewellery
The Gem & Jewellery Export Promotion Council (GJEPC) is setting up the first-of-its-kind Indian Institute of Gem & Jewellery (IIGJ) in Varanasi, Uttar Pradesh. It is expected that the export of gems and jewellery would significantly improve from the city of Varanasi and eastern India.
Online Jewellery India Market
There were positive consequences of 30 days strike and demonetization on jewelry online India market. Indian picks digital transactions to purchase the jewellery which was an advantage for jewellery online India sector, which created a gradual growth in the sale of online jewelry stores India. The price fall to11% in gold has encouraged consumers to buy jewellery through e-cash, digital wallets & electronic card. An increasing popularity in ethnic Indian jewellery designs was witnessed all across the globe, especially during the festive season PayPal has partnered with hundreds of jewellery online shopping India retail chain.
Black money, PAN card issues
Government decided that the PAN Card will be mandatory for transactions over Rs 2 lakh, which reduced the sales. The point is anybody willing to spend is coming out. A lot of people are away from the markets and are not spending much because of fear of getting tax notices. It was great economic reform as no longer people can convert their black money into jewellery.
Fluctuation in Gold Prices
On 1st January (99.5 purity) there was a gigantic fall in gold prices making price of gold INR 24,910 per 10 grams which was the lowest after June 28, 2013.
While on 30th of March the prices increased to Rs 30,113 per 10 gm. On 6th of July gold peaked to its highest price of Rs 32,336 per 10 gm. Next on 14th October the price reduced to Rs 29,550 but in November it was again increased, this fluctuation in prices jewelers at many places in India like Nasik stopped selling jewellery.
Demonetization
When PM Mr. Modi announced that Rs. 500 and Rs. 1,000 notes will no longer be legal tender on 8 Nov 2016 Tuesday night, buyers crowded jewellery stores to dispose off cash and purchase gold.Several retail outlets extended opening hours even till post midnight to supply fro this extraordinary rush. The amount of jewellery sold on that day was more than Diwali and other wedding seasons. People were converting their cash into gold; however from the next day jewelers stopped accepting old notes which reduced jewellery sale. It resulted in total paralysis of jewellery business and over 55,000 goldsmiths, depending on this, were rendered jobless. There was a drop of Rs 450 crore for jewelers and call off of worth Rs 4,500 crore orders after demonetization in Tamil Nadu.
