Demonetisation: Jewellers under I-T scanner for sub- Rs 2 lakh split of saleshttps://indianexpress.com/article/business/business-others/demonetisation-jewellers-under-i-t-scanner-for-sub-rs-2-lakh-split-of-sales-4375907/

Demonetisation: Jewellers under I-T scanner for sub- Rs 2 lakh split of sales

Jewellers stayed open till late night after the Tuesday night’s announcement of Prime Minister Narendra Modi regarding withdrawal of old Rs 500 and Rs 1,000 currency notes.

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Gold and other precious metals emerged to be the preferred route for routing of unaccounted wealth.

Tax authorities are keeping a close watch on jewellers to check for any possible split of sales into sub-Rs 2 lakh to avoid quoting of PAN and necessary actions and penalty will be imposed wherever there are violations.

“PAN is mandatory for jewellery sale of over Rs 2 lakh. We are keeping a watch on jewellers to see if they are breaking their sales into parts of less than Rs 2 lakh,” CBDT chairman Sushil Chandra said. He said whether it is deposit of cash or sale of goods in old currency notes, tax authorities are keeping a close eye and taking steps.

WATCH VIDEO: PM Modi Reveals How He Planned Demonetisation Gradually In 10 Months

Gold and other precious metals emerged to be the preferred route for routing of unaccounted wealth, after the government scrapped old Rs 500 and Rs 1,000 currency notes, which was reflected in rise in price of gold last week. Gold was reported to have been sold at Rs 50,000 per ten grams last week against the market price of Rs 31,000 per ten grams as gold and bullion were said to be used by people to dispose off their old series notes.

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A 20-40 per cent haircut in the value of defunct currency was also being resorted by jewellers to launder black money. Also, there are fears that jewellers could show backdated cash sales. While jewellers and diamond traders usually show bills every week while depositing cash generated through sales, very high value deals in cash are often split in smaller amounts.

Jewellers stayed open till late night after the Tuesday night’s announcement of Prime Minister Narendra Modi regarding withdrawal of old Rs 500 and Rs 1,000 currency notes in the government’s move against black money, corruption and counterfeit currency. As much as 250-kg gold was reportedly sold in Mumbai within a few hours of the announcement. Finance Ministry has ordered all its revenue intelligence agencies to join the crackdown on jewellers and hawala operators besides tracking movement of demonetised currency notes. The Enforcement Directorate (ED) and the Directorate General of Central Excise intelligence (DGCEI) have now joined the income tax department in the crackdown.

The Income Tax department has sent around 600 notices to jewellers across 25 cities asking them for details on daily sales between November 7 and 10. Teams of DGCEI officials are also visiting major jewellery stores and their manufacturing units to serve notices seeking these details.

Jewellers in major cities like Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Bangalore, Hyderabad, Bhopal, Vijaywada, Nashik and Lucknow are initially under the scrutiny of the DGCEI officials, which may be later extended to other cities also.

Last week, revenue secretary Hasmukh Adhia had said that action will be taken against those jewellers who fail to take PAN numbers from buyers who are resorting to purchase of jewellery as a route to dispose off their unaccounted wealth. When the cash deposits of the jewellers would be scrutinised against the sales made, whether they have taken the PAN number of the buyer or not will also be checked, he had said.