Rejecting Oppositions’ charge that one per cent excise duty on non-silver jewellery was killing the trade, with small jewellers and artisans bearing the brunt, Union finance minister Arun Jaitley on T
Rejecting Oppositions’ charge that one per cent excise duty on non-silver jewellery was killing the trade, with small jewellers and artisans bearing the brunt, Union finance minister Arun Jaitley on Thursday said while luxury items cannot be kept out of tax ambit for perpetuity, the government is making it sure that those involved in the business are not harassed. Refusing to roll back the excise duty, the minister also gave details to members in Rajya Sabha, which was taking up a Calling Attention notice moved by Congress’s Raj Babbar, as why and on who the tax will be applied. However, Congress and SP members later staged a walkout from the House.
Refuting allegations that imposition of the levy was killing the trade, Mr Jaitley asserted that there was absolutely no harassment of artisans. He said corporate jewellers with up to Rs 12 crore turnover last year and up to Rs 6 crore turnover in this fiscal were exempt from it.
“Clearances up to Rs 6 crore in a financial year (if clearances during preceding year were less than Rs 12 crore), are exempt from this duty,” Mr Jaitley said, adding “thus small jewellers and artisans are not covered within the ambit of this levy.”
The minister said “when there is excise duty on items like soap, toothpaste, razor, pencil, ink, fruit juices and baby food, why should the luxury items be exempted from it.”
Opposition members had charged the government of killing the traditional jewellery trade and promoting the big brands by imposing the levy and later Congress and Samajwadi Party members walked out of the House.
The jewellers have been on a nationwide strike for over 40 days.
Mr Jaitley said even imitation jewellery attracted 6 per cent excise duty and added that when things used by common people were taxed “how can luxury items be out of its ambit for so long.”
He said the opposition should understand that it is a complex subject and when taxes are levied on items like steel, cement and clothes, luxury items cannot be out of its purview.
“We have to decide on which items we will impose excise duty and if there is any structured trade, they do not get the right to resort to agitation against tax,” he said and challenged the opposition that if they were so concerned about it, they should get the 5 per cent VAT removed in Kerala.
“Each state imposes VAT on gold and in Kerala it is as high as 5 per cent and if you (opposition) are so much concerned then get it removed from Kerala,” he said.
Dismissing charges that excise duty has hit hard small artisans, the minister said the trade has not developed such that annual turnovers of small jewellers has crossed Rs 6 crore and stressed that “this is implemented on big chains.”
Mr Jaitley said the UPA government had imposed taxes on jewellery in 2005 but recalled it in 2009 in the face of stiff opposition. It had again imposed tax in 2012 but recalled it later.
The finance minister said the levy was a step towards implementation of GST and if luxury items were not taxed, “you can never reach 18 per cent (GST rate) cap.”
To ensure that there is no harrassment to jewellers, the government has for the benefit of gold trade provided for no physical verification, he said, adding the jewellers have been asked to pay excise duty with self certication on VAT returns.
Refuting the opposition charges of harrassment of jewellers by excise officials, Mr Jaitley said, “if any excise official or Khaki dressed men harrasses, any jeweller just needs to click a snap on their mobile and send it to me.”
To address their concerns, the government has even formed a committee, headed by former Chief Economic Advisor Ashok Lahiri, and three of the representatives of jewellers will be included in it. It is upto the jewellers to decided on their representatives as there are dozens of organisations, Mr Jaitley said.
On registration of jewellers, he said so far 206 registrations have come and the deadline for it has been extended till June 30 from March 31.
Statistics show that consumption of gold is highest by those in the higher income group compared to those in the lower income group and thus the levy of excise duty would not affect small consumers.
