Watch and accessories maker, Titan, said that the incidence of 28 per cent tax on watches under the GST regime is one of the highest in the world that could increase the risk of smuggling.
"At 28 per cent, India has one of the highest tax rates for watches in the world, consequently increasing the risk of smuggling of watches into the country," Titan Company Ltd informed BSE.
However, the company has ruled out any price increase immediately.
The company stated, "While the GST rate of 28 per cent will increase the effective tax incidence on watch division, we do not expect prices to go up because of input tax credits available now."
The company has a range of watches including its own brands such as Titan, Sonata, Fastrack, Xylys, Nebula along with licensed brands such as Police, Tommy Hilfiger, FCUK, Kenneth Cole, Anne Klein, Helios and Zoop in India.
Besides, Titan has also witnessed around 50 per cent jump in its sales during Akshaya Tritiya (AT) period in the first quarter of this fiscal.
It has a successful gold exchange programme in June 2017 resulting in an exceptional growth on topline for the division.
"The year started off for the division with a great AT, with 50 per cent growth over previous year's AT period as well as a very successful gold exchange programme in June 2017", it said.
However, the company further added, In the first quarter, there was a strike of jewellers for 15-20 days, hence the base for Q1 FY 2017-18 is also more favorable to that extent."