Karnataka: Carry PAN card to buy gold!

Bengaluru: The ‘Pan Effect’ is wrecking the prospects of small and medium jewellers in Karnataka. The impact is so serious that revenues of jewellery owners have come down by a whopping 30-35 per cent after the Union government's decision to make the PAN card mandatory for purchase of gold and other jewellery valued at above Rs 2 lakh.

“First, big branded companies entered the scene and hit our business hard. Now, comes the PAN rule. After the Union government made the PAN card compulsory for costly purchases, our business has come down by 35% with people reluctant to share their PAN number. Small and medium  jewellery shops will soon become history if no corrective action is taken,” says Mr Sunil M. Bhupalam, owner of Rajatha Jewellery  on Avenue road. “The new rule has created a lot of inconvenience. We want the central government to relax this to save industry,” he said.

But the salaried class of the city has no problem with the new rule. “The PAN card rule makes our purchases more authentic and foolproof. Anyway, I need to file my returns every year. If the business has been hit by this rule, it is a sign that black money circulation has come down,” says Ms Shreya Bhat, a CA student.

According to the new rule which was implemented from January1, 2016  the Union finance ministry has made PAN mandatory for all jewel purchases both with card and cash above above Rs 2 lakh. The main objective was to check black money circulation in the domestic market. But according to industry insiders, this has created more problems for them.

According to another gold seller who wished to remain anonymous, it has become a headache for traders to convince customers to share their PAN card number. “Those who are aware of the new rule, are not coming forward to make new purchases for reasons known to them. They refuse to share their PAN card details. Many customers return their ornaments once they come to know about this rule. These are the practical problems we are facing,” he said.