Mumbai/New Delhi, March 17: Jewellers in major metros across the country began a three-day strike to protest the hike in import duty on gold. The jewellers will keep their shops closed on March 17, 18 and 19.
Mumbai's famous Zaveri Bazaar remained closed today as shopkeepers downed their shutters.
Mohit Kamboj, chairman, Bombay Bullion Association, and Prithviraj Kothari, vice chairman, Bombay Bullion Association led the bullion traders and took out a procession wearing black bands.
Bullion traders said, their business would be badly affected if the government implemented the Budget proposal to hike customs duty on gold.
Vimal Goel, president of Delhi Bullion and Jewellers Welfare Association, said, bullion traders in the capital have also begun their three-day strike.
Goel said, soon after the Budget announcement, price of gold in Kolkata became Rs 100 lower than that of Delhi price, whereas it usually remains Rs 100 per 10 gm more than that of Delhi price. This was because of the scope for illegal smuggling of Bangladesh gold into India, he pointed out.
Goel said, 4 percent hike in import duty plus 1 per cent VAT would make gold ornaments costlier now.
The jewellers are particularly angry over extra 1 pc tax on non-branded ornaments. They say, this has been done under pressure from multinationals and select Indian corporates.
Jewellery shops across Karnataka began their three-day strike from today.
On Friday, soon after the Budget, gold rose by Rs 450 to Rs 28,140 per 10 grams as stockists created fresh positions to meet seasonal demand, triggered by proposals to hike import duty.
Silver followed suit and jumped up by Rs 300 to Rs 56,500 per kg, as industrial units purchased more on fears of price rise in the coming days.
Traders said the bullion market is shocked over budgetary proposals to hike import duty for the second time this year on standard gold bar and coins exceeding and unbranded ornaments.
They said the upsurge was further supported as gold in overseas markets spurted, raising fears of more rise in the prices.
The government will tax gold bars and coins and platinum at 4 per cent, Mukherjee told Parliament in his budget speech. The government had set 2 per cent duty on January 17 this year. There was no change in the tax on silver.
"The hike in import duty will only make gold expensive for the retail customers and encourage illegal supply into the country," said Surender Jain, general secretary of All India Sarafa (Bullion) Bazar.
He said traders will pass-on the proposed hike in duty to customers which is likely to reduce demand.