FM refuses to withdraw excise duty on Jewellers

Krishnanand Tripathi
Finance Minister Arun Jaitley listed the measures to prevent harassment of jewellers by excise inspectors.

Finance Minister Arun Jaitley listed the measures to prevent harassment of jewellers by excise inspectors.

Finance Minister Arun Jaitley today refused to withdraw levy of 1% excise duty on non silver jewellery. Responding to a calling attention motion moved by Congress Member Raj Babbar in the Rajya Sabha, Jaitley said luxury items cannot be kept out of the tax ambit when it was levied on essential items.

Congress, Samajwadi Party and BJD members walked out from the Rajya Sabha in protest of the government’s refusal to withdraw the tax.

Finance Minister also refuted the charges that the levy of 1 per cent excise duty on non silver jewellery was adversely affecting the trade.

He said it was only applicable on jewellers who have turn over in excess of Rs. 12 crore. He said only 206 jewellers have registered under this category for payment of excise duty.

Jaitley said corporate jewellers with upto Rs 12 crore turnover last year came under its ambit and upto Rs 6 crore turnover in a fiscal was exempt from it.

“Clearances up to Rs 6 crore in a financial year (if clearances during preceding year were less than Rs 12 crore), are exempt from this duty,” Jaitley said, adding “thus small jewellers and artisans are not covered within the ambit of this levy.”

He informed the date of registration for payment of excise had been extended from March 31 to June 30.

Congress member Raj Babbar has moved the calling attention motion on the issue of levy of 1% excise duty on jewellers.

Congress member Raj Babbar has moved the calling attention motion on the issue of levy of 1% excise duty on jewellers.

Finance Minister said the centre could only levy exicse duty as raising the custom duty on import of gold from existing 10% would be counter productive and may lead to increased smuggling of precious metal in the country.

However, finance minister, admitted the need to have measures to protect the jewellers from harassment by excise inspectors. He informed that the government had formed a committee under the chairmanship of Dr. Ashok Lahiri and industry was expected to given names of 3 members to suggest ways to prevent harassment of jewellers.

He informed the Rajya Sabha that Central Board of Excise & Customs had already written letters to field units for not conducting the physical verification.

He said the government would rely on self assessment and self certification instead.

He said the taxe would be subsumed in a common goods and services tax in the coming months if the Congress party supported the passage of the constitutional amendment bill.

Replying to a calling attention on the issue, Jaitley said “when there is excise duty on items like soap, toothpaste, razor, pencil, ink, fruit juices and baby food, why should the luxury items be exempted from it.”

Opposition members had earlier charged the government of killing the traditional jewellery trade and promoting the big brands by imposing the levy. The jewellers have been on a nationwide strike for over 40 days to protest the levy.

Jaitley said even imitation jewellery attracted 6 per cent excise duty and added that when things used by common people were taxed “how can luxury items be out of its ambit for so long.”

Jaitley said the UPA government had imposed taxes on jewellery in 2005 but had recalled it in 2009 in the face of stiff opposition. It again imposed it in 2012 but recalled the same again.

“We have to decide on which items we will impose excise duty and if there is any structured trade, they do not get the right to resort to agitation against tax,” he said and challenged the opposition that if they were so concerned about it, they should get the 5 per cent VAT removed in Kerala.

“Each state imposes VAT on gold and in Kerala it is as high as 5 per cent and if you (opposition) are so much concerned then get it removed from Kerala,” he said.