Afraid of taxmen, jewellers refuse to accept old notes, keep shops shut

Even as the Bombay Bullion market has not declared the gold rates since the demonitisation of big currency notes on, several jewellers have been selling the bullion at even Rs 52,000 per 10 grams against scrapped notes. However, fearing the wrath of taxmen, many jewellers have stopped doing business, and those doing it, are doing at their own risk.

On Tuesday, gold and jewellery establishments in the national capital remained closed for the 5th day today after the Income Tax Department conducted surveys following reports of alleged profiteering and tax evasion by traders and other operators in reported conversion of demonetised notes.

According to the sources, the officials of Directorate General of Central Excise Intelligence (DGCEI), an arm under the Finance Ministry, has sent notices to these jewellers seeking details of the gold sales.
Meanwhile at Zaveri Bazar, Indian Bullion and Jewellers Association (IBJA) on Sunday sent messages to jewellers that there was the possibility of the income-tax department asking them to deposit old currency with it by November 15, to stop the malpractice of selling gold at a premium for banned currencies. The last date for depositing the banned currency notes with banks or exchanges has otherwise been fixed as December 30.

So far, however, there has been no official communication on this from any department, according Surendra Mehta, Secretary, IBJA. “No jewellers, to our best knowledge, are accepting old notes now,” Mehta said.

Against an average monthly import of 30 tonnes since February, October alone saw an import of an estimated $3.5 billion, or 56 tonnes, of gold.

No one is ready to predict the import trend in the coming weeks, as there are fears that the government might impose a ban on gold imports. However, there has been no official word on this so far.

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