With the government's decision to impose 2 percent luxury tax on gold and gold jewelery and 13 percent value added tax (VAT) on precious stones including diamonds through the budget of the financial year 2082/83, jewelers have hit the streets. After the budget speech, they protested by forming a struggle committee and protested on Sunday.

Jewelers, led by Nepal gold and silver businessmen and Kaligarh Sangharsh Samiti, protested with a rally from New Road Gate to Indrachowk Double. They demand that the government's policy will increase the price of jewelery and business will be stopped, and the budget should be withdrawn. 

The law recognizes gold as an asset like cash. Bipin Ramudamu, chairman of Sangharsh Samiti, said that the 2 percent luxury tax imposed on gold should be abolished. "The 13 percent value added tax imposed on diamonds and jewelery should be abolished and the previous regime should be maintained."

Ramudamu said that after meeting with Prime Minister KP Sharma Oli and Finance Minister Bishnu Paudel, they will make a demand and if there is no positive support from the government, they will protest by closing shops across Nepal from June 2. 

The former president of the Nepal Gold and Silver Traders Federation Manikaratna Shakya said that the jewelry sector will reach a state of collapse due to the government's policy. He said that the 2 percent luxury tax will increase the price of jewelery according to the level. In the first tier (banks), per tola will increase to Rs 4,000. After that, the second level (producer/Kaligarh) may increase by Rs 4,000 and the third level (jewellery seller) may increase by Rs 4,000,” Shakya said, “Thus, if the price increases at different levels, the price of jewelery will be higher. When there is a recession in the jewelry sector, jewelers become bankrupt. Therefore, the government should correct the decision immediately.' 

Shakya says that there is no alternative to protest until the government reforms the policy. Since gold jewelry is expensive, the government has imposed a luxury tax. Earlier, 2% luxury tax was levied on gold and gold jewelery and diamonds above Rs 10 lakh. The senior vice-president of the federation, Diyasaratna Shakya, also said that the luxury tax will increase consumer prices excessively.

According to him, 19% VAT will be charged on jewelery made with gold, including diamond, amethyst, emerald, ruby, etc. He said that with this policy, the gap between the buying rate and the selling rate will be high. As the price of gold has reached around 200,000 tolas, the sale is almost at a standstill. "Even though there is a lot of sales during the wedding season, the shop is deserted at other times," said Shakya, the senior vice-president of the federation, adding, "If this policy is implemented, the prices will increase even more." Now the gold and silver market has to be closed.'