Proposed Indian Jewelry Taxation Could Cripple Industry
The Indian government is looking to earn more from a thriving Indian Jewelry market that is posting strong gains despite worldwide numbers to the contrary. Just recently, the Indian government moved ahead with its proposal to charge a 1% excise tax on all purchases of branded Indian jewelry. While 1% may not seem like much, in the world of high-end purchases, 1% could easily spell the difference between an additional $2,000 in payment.
The discussion now revolves on the definition of "branded". Remarks Vinod Hayagriv, chairman of the All-India Gems and Jewellery Trade Federation, "We do not understand the rationale behind this step. The gems and jewelry industry is very unhappy and burdened enormously. The entire industry believes that while they are working towards ethical, transparent trade practices, these kind of levies and back-door license raj measures (an Indian term for the excessive bureaucratic interference in business by socialist-oriented governments) will create hardship, litigation and encourage corruption. We urge the finance minister to roll back the 1 percent excise duty on 'branded' jewelry."