Budget 2016 has unsettled many quarters in the country. Jewellers across the country have decided to pull down shutters for three days protesting against the budget imposition of one per cent excise duty in the jewellery sector.
Finance Minister Arun Jaitley while presenting the budget for 2016-17 said the government proposes to levy one per cent excise duty on jewellery without input credit or 12.5 per cent with input tax credit on articles of jewellery excluding silver jewellery other than studded with diamonds and other precious stones.
The strike is being called by the All India Gems and Jewellery Trade Federation (GJF) along with All India Jewellery Associations including manufacturers, wholesalers and retailers. All retail jewelers, manufacturers and wholesalers have decided to join the strike over the government apathy towards the industry which had earlier declared it as a thrust area for job creation of on lakh people per annum through Make in India initiative. This policy will choke the trade, industry sources said.
G V Sreedhar GJF Chairman, said “We are compelled to take the decision of going for three days all India bandh of jewellery trade and manufacturing to protest against the excise duty which is damaging to the growth of industry,” he said.
The proposed excise duty of one per cent without input credit or 12.5 per cent excise with input credit will create huge liabilities for small manufacturers, who employ unskilled day-to-day labor at large, the very people the government wishes to exempt, Sreedhar pointed out.
The three day strike will lead to loss of around Rs 5,000 crore, say industry sources. But the trade is determined to protest to get a complete rollback on excise duty. Interestingly, the UPA government had introduced excise in the sector in 2005 and 2012 but had to withdraw it when the trade protested against it.
The GJF is a national trade federation established for the promotion and growth of gems and jewellery trade across India. It represents over 6,00,000 players comprising manufacturers, wholesalers, retailers, distributors, laboratories, gemologists, designers and allied services to the domestic Gems & Jewellery industry.
Bullion market and most of jewellery showrooms remained closed in the national capital, Chennai and Puducherry among other states. Surinder Kumar Jain, Vice-President of the All India Sarafa Association, said that the proposed excise duty will lead to a drastic fall in business. “Small jewellers are irked with the proposed levy of excise as they do not understand the legalities of it. Keeping in view of their demand, we have decided to shut our establishments for three days," Jain said.
The domestic industry is estimated to be in the region of Rs. 3.15 lakh crores with the potential to grow to Rs. 5 lakh crore by 2018. The Federation’s mission is to support and promote the progress and prosperity of all members in the gems and jewellery industry across India.
All India Gem and Jewellery Trade Federation, Zonal Chairman N Anantha Padmanabhan said the central government's proposal was a big disappointment for the traders and would be further intensifying the protest. "It is a big disappointment for us. We were expecting that the condition of providing PAN Card for purchase of jewels worth Rs two lakh to go above Rs five lakh. But it did not happen. We will be meeting government officials in Delhi to express our views shortly" he said.