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Tax
on jewellery sure to push prices up The tax exemption on income earned from the sale of gems, gold or jewellery has been removed by the Budget and from next year such income will be taxed at 15 per cent while the VAT on jewellery has been increased by three per cent. Accordingly a gold sovereign sold at Rs. 11,500 will go up by about Rs. 1,725. "At the moment there won't be an immediate impact on the customers as the VAT has been increased by only three percent. And we are now focusing on our seasonal budget, so the there will not be much of a difference. But from next year, it'll be a little difficult for us", Vogue Jewellers Finance Manager Nandana Herath said. "We are selling jewellery at all inclusive prices. Now that we are charged income tax, we will have to increase the price if we are to maintain a profit. Customers buy jewellery not only to wear but also as an investment. So we can't say that people will not buy jewellery because of the increasing price of the jewellery", an employee at Swarnamahal Jewellers Ltd. said. "The price hike may make the customers think twice about buying gold jewellery, but we cannot say the whole industry will be affected. For a while things may not turn out to be good for us. But later on, we will be able to do something regarding the price" , Pattakanu Subbiah and Sons Managing Director S.I. Thiyagaraja said. "People don't like to buy when the prices are high. These days fewer customers are purchasing gold jewellery. Only about 10% of the customers have bought jewellery from our shop. It's very difficult for us", an employee of Pushpa Jewellers, in Negombo – which used to sell a gold sovereign at Rs. 12, 000 said. |
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