COVAI POST EXCLUSIVE

After demonetisation and GST, the jewellery industry appears to have explored a way out to evade taxes and put into use unaccounted money.

Jewellery industry dealings are between the retail jewellers and goldsmiths. The retailers use bank accounts of goldsmiths for this. The monthly earnings of a goldsmith with 12 normal working hours a day are between Rs 12,000 and Rs18,000. But, regular transactions of huge amounts through cheques for around Rs 40,000 are made to their accounts. Goldsmiths have to bear the transaction charges as well.

A goldsmith, on condition of anonymity, told The Covai Post that the making charges are where the retailers have seen opportunity.

“The making charges we receive will be 2.5 to 3 gms of gold for 100 gms, which, going by today’s rate, will be around Rs 6,600. But the middleman will collect a cheque for Rs 40,000 from the jeweller as well as making charges,” he added.

“We are supposed to clear that cheque through our bank account, paying additional clearing charges, if any, and hand over the cash to retailers,” he said.

The goldsmith alleged that for a Rs 40,000-cheque, they end up paying Rs 40,400. “The middleman has put us in a fix, because we are at his mercy for business. We are also to face income tax issues as well. We will have to pay the yearly tax returns ourselves,” the goldsmith revealed.

He is also not sure if the retailer is returning the money to the jeweller. But the net result is that the goldsmith ends up as the loser.