Coimbatore, which is the third largest jewellery manufacturer in the country, is likely to be hit by the new levy proposed in the Union Budget.
According to B. Muthuvenkatraman, president of the Coimbatore Jewellery Manufacturers' Association, with 20,000 jewellery manufacturers, the jewellery made here accounts for one-fifth of sales in the country. Manufacturing is down by 20 per cent since January this year as the Central Government has made PAN card mandatory for purchases above Rs. 2 lakh.
In the Union Budget, announced on Monday, the Government has proposed one per cent tax deduction at source for purchases of Rs. 2 lakh or more.
It has also announced one per cent excise duty for manufacturers and retailers with annual turnover of more than Rs. 6 crore, he said. We are very much worried with this. The Government has not discussed the proposals with us, he said.
The manufacturers and retailers have no option but to pass on the additional cost to customers and fear loss of business to those with lesser turnover.
The manufacturers across the country have an audio conference on Tuesday to decide on the future course of action, he said.