Jewellery Stocks Shine As Month-Long Strike Ends

Jewellery stocks rallied sharply on Wednesday after jewellers reopened their shops following a month-old strike. Shree Ganesh Jewellery House shares zoomed 8 per cent, while Gitanjali Gems surged 7 per cent.  In comparison, the Nifty was up 1.8 per cent. 

Other major gainers included Tribhovandas Bhimji Zaveri, Rajesh Export, Titan Company and Tara Jewels, which were all up between 1 per cent and 2.5 per cent.  

The month-old strike, to protest the imposition of 1 per cent excise tax on non-silver jewellery, hit sales of jewellers during the festive period of Baisakhi and Gudi Padwa. 

Sanjeev Agarwal, CEO of Gitanjali Exports Corporation, told NDTV Profit that the strike cost the industry Rs 50,000 crore to Rs 60,000 crore.  Gitanjali Gems, however, has not been significantly impacted by the strike, he said.

"The group is diversified across diamond cutting and polishing and jewellery and between international and domestic market. The domestic retail and wholesale sales that would have been impacted by the stir would have been 15-20 per cent of monthly sales," Mr Agarwal added. 

Finance Minister Arun Jaitley has been firm on excise duty levy on non-silver jewellery goods, saying that there was no reason why luxury items should be exempted when the country was moving toward goods and services tax (GST).

However, to address the jewellers' issues and examine procedural aspects of the levy, the government has constituted a panel under former chief economic advisor Ashok Lahiri. 

The panel will also look into issues related to smooth compliance and hassle-free administration, including records to be maintained, forms to be filled, operating methods and other relevant areas.

Besides excise duty, jewellers are also opposed to the mandatory quoting of the personal account number (PAN) by customers for transactions of Rs 2 lakh and above. (With Agency Inputs)