Kolkata: The All India Gems and Jewellery Trade Federation on Monday extended by two more days their strike to protest the government’s budget proposal to hike basic customs duty on standard gold bars and gold coins.

“Union finance ministry has asked representatives of various associations to discuss the issue. Unless there is a suitable proposal from the Government, the shutdown will be continued,” Gems and Jewellery Export Promotion Council regional chairman Pankaj Parekh said here.

About one lakh gold jewellery makers have been observing a nationwide shutdown since March 17.

The Government for the second time this year doubled import tax on gold bars to 4 percent to check excessive gold imports, blamed for India’s soaring current account deficit.

Parekh, however, said the rise in custom duty will translate into rise in jewellery prices and an increase in gold import through grey channels.

“We are apprehending import of gold from neighbouring countries like Bangladesh, Nepal and Pakistan through grey channels,” he said.

“Instead of increasing the import duty across the board, the finance minister might consider hiking VAT for the people, investing in gold bullion, from the current one percent to six percent. That would effectively check import,” Parekh added.

Source: IANS