on jewellery sure to push prices up
With the imposition of taxes on jewellery and gems the industry
was preparing to push their prices up.
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.
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.
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.
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.
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.