Government to keep a strict vigil on gems and jewellery sector

In a bid to crack down on hoarders and launderers of black money, the reigning government has come up with a new plan, says news reports.

According to news reports, the government is preparing the new rules to keep a strict watch on the gems and jewellery sector. Retailers would soon have to report purchases above Rs. 6 lakh to the Financial Intelligence Unit. As per a Hindustan Times report, the new rules would also apply to retailers of other luxury goods.

The news report states that the government believes that apart from helping government agencies such as the Enforcement Directorate detect money laundering, these reports could also help the Income-Tax department identify individuals whose purchases are disproportionate to their known sources of income.

The National Democratic Alliance (NDA) governemnt has reportedly announced several other measures to crack down on black money and money laundering, including deregistering shell companies that exist solely to facilitate such transactions and strengthening the Benami Transactions Act. Notably, post demonetisation, the government had increased scrutiny of cash transactions, banning those above Rs. 2 lakh and reporting of PAN for any transaction of Rs. 50,000 or above.

Meanwhile, yesterday, GST Council met for its 25th meeting in New Delhi. The council announced cut in GST rate from 3 per cent to 0.25 per cent on diamonds and precious stones.