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FinMin reiterates stand on jewellery excise

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While the jewellery trade continues its stir for withdrawal of the one per cent excise duty announced in the Union Budget, the finance ministry does not indicate a compromise.
"There is no question of a rollback," said a ministry official, on condition of anonymity, adding: "Our internal calculations show the government will get only about Rs 1,000 crore (a year) from the levy."
The strike entered the 17th day on Thursday, also marked by a big rally at Delhi's Ramlila Maidan.
"What are they scared of? We have given them all the assurance that they want. The taxman will not visit their premises," said the official. The ministry has instructed field formations against interfering with the business functions of manufacturers. Instructions to tax officials say no stock declaration will be required to be made to the excise tax authorities by jewellery makers. And, tax officials have been told not visit the premises of these assessees for routine purposes like stock verification of records. And, to ensure export consignments are not delayed on account of the new levy.
The official said the one per cent duty was a preparation for the coming national goods and services tax (GST) regime. "If they cannot pay one per cent excise, how will they pay the higher tax under GST," he asked.
A panel chaired by chief economic adviser Arvind Subramanian has proposed taxing of gold and precious metals at two to six per cent under GST, as against the standard rate of 17-18 per cent.
As against an excise exemption limit of 1.5 crore a year for normal small scale industry, the jewellery sector has an exemption limit of Rs 6 crore. Jewellers with a turnover below Rs 12 crore in a financial year will be eligible for exemption up to Rs 6 crore the next year.
Business Standard, New Delhi, 18th March 2016

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