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Jaitley justifies one percent duty on gold jewellery | Canindia News

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Jaitley justifies one percent duty on gold jewellery

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Kolkata, April 10 (IANS) Justifying the imposition of one percent excise duty on gold jewellery, union Finance Minister Arun Jaitley on Sunday said a luxury item like gold should not be exempted from the manufacturing tax when the country is moving towards Goods and Services Tax.

“There is no reason why a luxury item like gold should be kept out of the ambit of a manufacturing tax like excise duty. Since the manufacturing tax is levied on essential commodities like steel, cement, jute, cotton and others, why not on gold.

“The country is to move towards Goods and Services Tax (GST). Gold will also follow towards GST. Most states levy value added tax on gold,” he said.

He also noted that if gold is kept out of GST ambit, tax rate on rest of the goods will have to be increased. “There is no reason why a luxury item should be exempted from the tax and a higher rate of tax be imposed on other goods,” he said.

The government, in the Budget for 2016-17, had proposed one percent excise duty on jewellery without input credit or 12.5 percent with input tax credit on jewellery excluding silver other than those studded with diamonds and precious stones.

Jewellers went on strike opposing one percent excise duty on gold jewellery. The strike enters 40th day on Sunday.

The central government subsequently clarified even for one percent excise duty, manufacturers were allowed to take credit of input services, which could be utilised for payment of duty on jewellery.

It further said that only jewellers, whose turnover in the preceding financial year was more than Rs.12 crore, will be liable to pay the excise duty and those having turnover below Rs.12 crore would be eligible for exemption unto Rs 6 crore during next financial year.

“Jeweller’s private records or records for state value added tax or records for Bureau of Indian Standards (in the case of hallmarked jewellery) will be accepted for all central excise purposes,” it clarified.

Also, there is no requirement to file a stock declaration to the jurisdictional central excise authorities, it added.

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