PMLA extension worries jewellers

MUMBAI: Industry might be worried about the impact of GST on sales and the problems of filing returns. But the jewellery industry has a bigger problem on hand. Extension of provisions of the Prevention of Money Laundering Act, 2002, ( PMLA) to jewellery purchases could potentially crimp legitimate sales because of stringent KYC provisions, say organised jewellers and a leading industry association.

“The GST has had very minor, if any, impact on business,” said Sandeep Kulhalli, senior vice president, retail and marketing, Tanishq.

“While it’s early days to assess the PMLA impact on business there are concerns of organised trade suffering if customers move to the unorganised segment to obviate the KYC rules under PMLA.”

The government on August 23 extended the stringent provisions of PMLA, 2002 to the gems and jewellery sector on suspicions of elements in the trade facilitating money laundering, especially post demonetisation last year.

While the income tax act allows cash sales of up to Rs 2 lakh without KYC, the norms of PMLA restrict sales in any format to Rs 50,000 without proof of PAN, Aadhaar, driving licence or passport copy.