Union Budget 2016: Gold jewellery just got costlier

The government on Monday reimposed 1 per cent excise duty on gold jewellery after a gap of four years in a bid to curb demand, which the industry said would make objects costlier and impact their business.

In the Union Budget 2016-17, Union finance minister Arun Jaitley imposed 1 per cent excise duty (without CENVAT credit) or 12.5 per cent (with CENVAT credit) on articles of gold jewellery.

Silver jewellery, other than studded with diamonds or other precious stones namely, ruby, emerald and sapphire have been excluded from the excise duty. That apart, excise duty on refined gold bars manufactured from gold dore bar, silver dore bar, gold ore or concentrate, silver ore or concentrate, copper ore or concentrate, increased to 9.5 per cent from 9 per cent.

Similarly, excise duty on refined silver manufactured from silver ore or concentrate, silver dore bar, or gold dore bar -- has been increased to 8.5 per cent from 8 per cent.

Prospectively, the excise duty exemption under the existing area based exemptions on refined gold silver is being withdrawn, the budget document said.