Retailers cry foul on new PAN rule for high-value purchases
POS
ram@justransact.com
11-03-2015 00:00:00
Retailers cry foul on new PAN rule for high-value purchases
Retail industry is rife with apprehensions after finance minister Arun Jaitley in his maiden full budget speech proposed to make PAN compulsory for any retail purchase exceeding Rs one lakh.

The intention behind the new rule was to curb black money. Though there has been resentment among retail sector, e-tailers believe that such move will have no impact on their business. However, retailers of TV sets, mobile phones, watches, travel bookings and jewellery showrooms feel that the new rule, which will be implemented from April 2015, will hamper their business as consumers will limit their spending to avoid being tracked by IT radar.

The challenge for e-retailers would be to get PAN details of buyers for such transactions and verify them. Which means there will be delay in shipping products. According to a spokesperson of a leading online shopping site, such rule would not impact high value purchases. "We don't foresee any risk as purchases above Rs 1 lakh are allowed only through net banking, debit or credit card payments."

However, according to Vijay Shekhar Sharma, founder and CEO of Paytm, a mobile wallet firm, companies involved in big-ticket online transactions, such as jewellers and travel portals, might find it difficult at first to get PAN details.

To protest government’s move, All India Gems and Jewellery Trade Federation, an association of some 30 branded jewellery players, may go on a nation-wide strike to force the government to roll back the proposal, which it said, would encourage buying and selling of costly items through illegal means.

"We will try to speak to the government to sort out this issue, lest we will go on an all-India strike against it," commented Vijay Khanna, the federation’s regional chairman (North).

Online retailers feel that the government has envisaged rise in online transaction above Rs one lakh and hence such move will affect the purchases in the long run. At present an average purchase size per person through online transaction is around Rs 2,000.

Balram Garg, MD of a Delhi-based jewellery company, which has forayed into e-commerce recently, echoed the same views. Muthu Kumar, marketing manager of a Chennai-based e-tailing firm, said, people, who don’t want to make their spending in white, will shy away from doing so. “We can control the black money transaction but retailers will face loss of revenue,” he added.

Retailers of luxurious products like branded jewellery, phones and watches have appealed to the government to roll back the move to make PAN mandatory for purchases above Rs 1 lakh, saying it will hit their business.
-K Ramanathan ram@justransact.com


No Comments Yet

Subscribe to comments feed

Leave a Reply

Your email address will not be published. Required fields are marked *

Let's Be Friends
Fb general logo Twitter icon Google Plus icon Youtube icon Pinterest Linkedin
Need help? Contact Us
cs@justransact.com (or) Call us: 1800 123 3010

×
©2013 - 2019 : View site: Desktop 22 years domain experience