Monday, 7th March 2005 (3931 views)

Jewellery firms in India are beginning to call off strike action following a clarification of the branded jewellery tax introduced in the union budget.

However, the clarification could still affect businesses since if a jeweller advertises and sells products under a brand and puts the same name, abbreviation or mark on jewellery, then these products will be considered branded.

This means that these products would then fall under new rules and would be taxed, according to Business Standard.

Bullion consultant Madhusudan Daga feels that this move would mean companies would not be able to advertise. He explained: "Advertisements especially during festival seasons such as Diwali and Dussera would not be easy any more.

In fact, not only television advertisements, but also banners and hoardings would be taken into account. This form of advertising is popular in the southern states."

Jewellery traders and manufacturers across the country had originally gone on strike when it was shown small jewellery firms would also be affected by new rules on jewellery branding and taxes.

The notification does states that jewellers who get ornaments made by goldsmiths and affix a logo, or those who mark ornaments for identification, will not need to pay tax though.

According to industry sources, companies will now approach the government again to address this new issue.

 

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