Jewellery purchases exceeding Rs 50,000 won’t require the income tax permanent account number (PAN) to be provided after the government reversed an earlier notification on Friday, providing a big festive cheer for the sector and potential customers.
Jewellers will also not be required to inform authorities about jewellery purchases of over Rs 50,000 after the government rescinded a notification issued on August 23.
Dealers in precious metals, precious stones and other high-value goods having a turnover of over Rs 2 crore in a financial year had been notified as persons carrying on designated business and professions under the Prevention of Money Laundering Act, (PMLA) 2002. This had made them reporting entities under the PMLA requiring them to intimate the relevant authorities about transactions above certain limits.
The government said the notification had been rescinded because certain incongruities had been brought to its notice and a fresh notification will be issued, indicating that the sector may still come under greater watch.
“The withdrawal of Rs 50,000 limit for KYC (know your customer) under PMLA is great news, as the imposition had impacted sentiment and sales to some extent,” said Sandeep Kulhalli, senior V-P, retail and marketing, Tanishq. Industry expects growth to recover after the taxation.
“With the festive season still under way, the withdrawal of the notification has raised prospects of sales recovering in the third quarter,” said Surendra Mehta, national secretary, India Bullion and Jewellers Association.
“The 30% year-on-year growth that our company and the organised sector witnessed in the fiscal quarter ended June was impacted slightly, down around 5% in the second quarter, by the extension of PMLA to the gems and jewellery trade on August 23,” said Balram Garg, managing director, PC Jewellers. Earlier, like other sectors, the threshold for KYC was Rs 2 lakh. This got lowered to Rs 50,000 after the jewellery sector was brought under PMLA on August 23.
“After considering various aspects of the issue, the government has decided to rescind the said notification. A separate notification after due consideration of points raised and wider stakeholder consultation in this regard shall be issued separately,” it said in a statement.
The entities covered by PMLA have to maintain records of all transactions of value exceeding Rs 10 lakh, all cross-border wire transfers of more than Rs 5 lakh and all purchases and sales of immovable property of Rs 50 lakh or more.
Source Economic Times