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BANGALORE: Gems and jewellery trade in the State will shut shop on Friday in protest against the State Government's proposal to increase Value Added Tax (VAT) on jewellery and gem stones.
The Government has, in its budget proposal, increased VAT on jewellery and gem stones from 1 per cent to 2 per cent.
“Jewellers in the State are fearing loss of business due to increase in VAT as customers may go to neighbouring States for purchases,” secretary of Jewellers Association of Bangalore S. Venkatesh Babu told The Hindu.
While VAT is levied at a rate of 1 per cent in neighbouring States, it has been increased to 2 per cent here, he added.
The increase in VAT has come at a time when customers are burdened with the rise in the prices of gold and silver, he said and added that the hike in VAT will affect jewellery trade.
“Some time ago, VAT was brought down from 4 per cent to 1 per cent, and VAT collections saw a remarkable increase. There is no reason why VAT has to be increased,” he said.
According to Mr. Babu, about 25,000 jewellery and gems establishments, including retail and big jewellery chains, will participate in the bandh.
The jewellers will stage a dharna in front of Mahatma Gandhi statue in Bangalore.
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