Arun Jaitley announced in his budget that excise duty of 1% without input tax credit, or 12.5% with input tax credit, has been imposed on jewellery articles
Bengaluru: A day after the central government announced additional excise duty on gold, India Bullion and Jewellers Association (IBJA), a jeweller’s association based in Mumbai’s biggest jewellery market Zaveri Bazaar, has called for an indefinite strike from Tuesday to protest the proposed 1% excise tax, said Ketan Shroff, joint secretary at the IBJA.
“We are going on an indefinite strike until further notice. We are informing all jewellers and traders across India to come for support," he said.
Finance minister Arun Jaitley announced in his budget speech on Monday that excise duty of 1% without input tax credit, or 12.5% with input tax credit, has been imposed on articles of jewellery (excluding silver jewellery, other than those studded with diamonds and some other precious stones). The budget also outlines slabs for these duties at ₹ 6 crore and ₹ 12 crore.
Jewellery retailers will also have to make provisions for tax collection at source (TCS) on sales of ₹ 2 lakh and above. Last year, the government mandated all jewellery retailers to impose mandatory PAN card requirement for purchase of jewellery worth above ₹ 2 lakh.
Retailers in India, one of the largest consumers of gold jewellery in the world, have often sparred over the extent and mode of taxation on the yellow metal.
“We are not so much against the amount of tax that is being levied, but the way it is—that is, through the excise department. They always take you for task and harass retailers," Shroff said.
Shroff added that jewellery retailers have historically been taxed excessively, from 10% custom duty, to an additional 1% VAT (value-added tax) and Octroi taxes.
“We are already paying a lot for a commodity costing ₹ 30,000. We don’t mind paying additional charges, but not as excise," he added.
“It will impact 90% of jewellery manufactured by small and micro sector and karigars and hence implementation is not at all practical," Saurabh Gadgil, chairman and managing director, PNG Jewellers, told Mint on Monday.
He said jewellery-making is the third-largest employment generator after agriculture and textile, creating a value addition of over ₹ 1 trillion, which is the same as the auto and chemical sector. So manufacturing and exports should be encouraged, he said.
Shroff said the association will send recommendations to the government.
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