The government today assured bullion traders and jewellers that it would reconsider its Budget proposals to double the import duty on gold and impose excise duty on unbranded jewellery that constitute a bulk of sales. Following this assurance from Finance Minister Pranab Mukherjee,the industry called off its 21-day strike.
Jeweller associations held meetings with Mukherjee and Congress President Sonia Gandhi over a series of tax proposals in the Budget 2012-13 on gold imports and jewellery. Besides proposing to double the customs duty on gold to 4 per cent,the Budget proposed to impose excise duty of 1 per cent on unbranded gold jewellery. It also sought to collect tax at source on sale of jewellery worth Rs 2 lakh or more.
The finance minister has assured jewellers that he would address their concerns at the time of consideration of the Finance Bill 2012 in Parliament, Central Board of Excise and Customs (CBEC) chairman SK Goel said after the meeting of jeweller associations with the finance minister.
The strike has been suspended till May 11,as the finance minister has assured us of a decision on rollback on excise duty and customs duty by the first week of May, Dinesh Jain,director of governing board,All-India Gems and Jewellery Trade Federation said after the meeting.
Meanwhile,the Congress party too has taken up the issue and has asked the government to look into the demands after the jewellers met UPA President Sonia Gandhi. Congress has asked the government to consider the demand of jewellers sympathetically, AICC general secretary and media department chief Janardhan Dwivedi said.
We met Sonia Gandhi today and requested her to tell the government to roll back excise duty on unbranded jewellery,reduce customs duty and lower TCS (tax collection at source) on sale of jewellery, All India Swarankar Sangh president Madhukar Chachad said. While jewellery shops would open from Saturday,jewellers have threatened to resume the strike if Mukherjee does not roll back the tax proposals.
In his reply to the general discussion on the Budget 2012-13 last month,Mukherjee had said that he would come out with some acceptable formulation. I have no intention of causing any harassment … All state governments charge value-added tax on gold jewellery. As there have been a lot of representations,I am considering it, he had said in the Lok Sabha. The CBEC has also clarified that the intention behind doubling the customs duty on gold was merely to reduce gold imports and reduce the current account deficit. It had also pointed out that the effective excise duty on gold jewellery would be as little as Rs 90 per 10 gm. India is the worlds largest gold consumer and imported 967 tonne of precious metal in 2011. Gold is the second biggest commodity imported after crude oil. Traders have lost an estimated Rs 20,000 crore on account of the strike that began on March 17 while the government may have lost about Rs 1,200 crore in revenue.
Budget 2012-13 proposed to double the customs duty on gold to 4 per cent,along with imposing excise duty of 1 per cent on unbranded gold jewellery
It Also sought to collect tax at source on sale of jewellery worth Rs 2 lakh or more
Jewellers say that the strike has been suspended till May 11,as the finance minister has assured of a decision on rollback on excise duty and customs duty by the first week of May