MUMBAI – Indian jewellers called off a 19-day strike late on Saturday after government assured they will not be “harassed” by the excise department in collecting a new tax, the head of a trade body.
After the government reintroduced a 1-percent excise duty on gold jewelry after four years, Indian jewelers went on an indefinite strike from the start of March. Noting that the world’s second-biggest gold consumer called off a 19-day strike late on Saturday after government stated and assured that they will not be “harassed” by the excise department in collecting a new tax, the head of a trade body.
Thus, starting from tomorrow jewelers will open shops as stated by the president of India Bullion and Jewelers Association (IBJA), Mohit Kamboj.

Kamboj said that the excise duty will remain there, however he added that the government has assured them officials from excise department will not harass jewelers.

Despite imposing a 10-percent import duty in 2013 and other restrictions, successive governments have struggled to curb appetite for gold in Asia’s third-largest economy. Annual imports of up to 1,000 tonnes of gold, accounting for about a quarter of India’s trade deficit, have also prompted the government to launch a scheme to mobilise a pool of more than 20,000 tonnes of the metal in homes and temples.

A decision made by the government to form a committee to address jewelers’ concerns, related to implementation of excise duty, Kamboj said, adding the committee will submit its report in two months (60 days).

The government imposed an excise duty in 2012, but was forced to roll it back after jewelers went on strike.
Jewelry sales in India have fallen since the start of the year due to higher gold prices and as consumers delayed purchases hoping for a cut in import duty in the budget. This has forced importers to offer a discount of up to $53 per ounce to clear inventory.

But Finance Minister Arun Jaitley surprised the market on Feb. 29 by maintaining import duty and imposing excise duty.

“There is lot of pent-up demand. Imports will rise from next week,” said a Mumbai-based dealer with a private bullion importing bank.

India’s February gold imports dropped to $1.44 billion, from $2.91 billion in January.