Mangalore : More than 100 jewelers staged protest march from Jyothi Circle DC Office against the recent proposed hike in VAT on March 25, Friday.
Protesting the recent proposed hike in VAT on jewellery from 1 per cent to 2 per cent by the Karnataka government, jewellers in the city closed their retail shops today.
Nagraj Palke, secretary of SK District Swarna Vyapari Sangha said that, Higher rate of tax will lead to lower compliance and loss of revenue to the state. It will also cause irreparable and permanent damage to the gems and jewellery sector. Besides, entrepreneurs from other states will be discouraged to set up business here.
He also said that If the government insists on 2 per cent VAT, manufacturing will move out of Karnataka and as a result, we expect more than 50 per cent of labour force to move to neighbouring states or become jobless. Thus, employment in the state will also be affected.
They also said that the higher rate if tax leads to lower compliance and loss of revenue to the state. Karnataka total market size of gems and jewellery is estimated at Ts 16000 crores.
At 1% VAT: Gold and silver bullion segment: (50 tonnes quantity) – Rs 10000 crores @ 1% = 100 crores VAT collection. Jewellery segment wholesale and manufacture: Rs 1500 crores @ 1 % = Rs 15 crore VAT collection; Retail jewellary segment: Rs 4500 crores @ 1% = Rs 45 crores VAT collection (Total VAT Rs 100 +15+45+crores = Rs 160 crores per annum)
Later the jewellers’ associations had submitted a memorandum to Chief Minister B S Yeddyurappa through DC Subodh Yadav, requesting a roll back of VAT from 2 per cent to the earlier 1 per cent.