Indian jewellers have received surprise tax notices asking them to turn over money they made from customers who scrambled to buy gold after Prime Minister Narendra Modi's 2016 ban on high-currency notes, according to a dozen jewellers and tax officials.
When Modi announced a sudden ban on Rs 500 and Rs 1,000 bills on Nov. 8, 2016 to weed out undeclared cash, clients thronged the store of one Mumbai-based jeweller, clamouring for necklaces, rings, bullion - anything gold.testing.. we are here....
The jeweller - who asked to only be identified by his surname, Jain, to avoid retribution - said he sold his entire stock at a steep premium that day and pocketed revenue usually earned in two weeks.
Three months ago, he received a tax notice asking for the source of those earnings and ordering him to turn in all revenue made that night, under suspicion that black money was behind the purchase.
Jain appealed against the order, but as per Indian law had to deposit 20% of the disputed amount.
"If we lose the case, then we have to close the business to pay the remaining amount," said Jain.
About 15,000 Indian jewellers have been sent tax demands similar to Jain's, said Surendra Mehta, secretary of the India Bullion and Jewellers Association.
Mehta estimated tax authorities are seeking around Rs 500 billion ($7 billion) from people in the gems and jewellery sector.
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