An Indian goldsmith makes jewellery at a workshop in Siliguri, India, Aug. 25, 2015,
Agence France-Presse/Getty Images
Thousands of jewelry shops in India pulled down their shutters Wednesday as they went on strike to protest against the government’s move to bring more jewelry sales under the tax net.
A rule that came into effect Jan. 1requires customers to share their tax identification number every time they spend 200,000 rupees ($2,946) or more on jewelry.
The Indian government is trying to prevent people amassing money on which they don’t pay tax.

Jewelers say their sales have fallen since the regulations came in, because the majority of the country’s population doesn’t pay tax or have tax identification numbers.

More In Gold

Less than 3% of India’s 1.2 billion-strong population pays income tax, former finance minister P. Chidambaram has said.
Jewelers say customers who do have tax ID numbers–printed on what are known as PAN cards in India–don’t always admit it.
“Why come under the government scanner?” says Ajay Gupta, a jewelry store owner in the south Indian city of Hyderabad.
Mr. Gupta said many customers walk away when they are asked to furnish their the number, and sales at his store in January were around 10% lower than the same period last year.
Atul Jain, a Delhi-based jeweler, says the rule will likely lead to more sales on which taxes aren’t paid–sometimes referred to as black money–because jewelers will be tempted to make sales without issuing a bill.
“Nobody would give up a sale for the reason of not getting a PAN card,” says Mr. Jain.
“It would promote a black money economy…wherein 50% of the jewelry sales will not be recorded.”
Trade associations are demanding that the PAN card be made mandatory only for sales of more than 1 million rupees ($14,730.)
For breaking news, features and analysis from India, follow WSJ India on Facebook.