Bleak prospects for luxury goods, thanks to new PAN rules?

The luxury items' market has been severely hit in recent times, following the government's directive that buyers need to furnish their permanent account number (PAN) for any transaction above Rs 2 lakh. The step was taken to put a full-stop on black money.

According to a Times of India report, consumers are not comfortable sharing their PAN details and as a result, are now making high value purchases abroad.

"Our bags start at Rs 2 lakh. Sales at our store have been hit badly because our regular customers have stopped coming," TOI quoted a senior executive of a French luxury brand.

"Earlier, most of them would pay in cash. But now, instead of giving their PAN details, they are opting to shop abroad," he added.

The report added that shopkeepers with luxury items have not come up with any solution yet to deal with the crisis of substantially lowered sales.

"We have taken a hit of several lakhs of rupees over the last few days but have not been able to figure out a way around the problem," the report quoted an executive at one of the stores as saying.