Govt says examining jewellery excise levy removal

Mumbai/New Delhi: India has agreed to examine jewellers demand for removal of excise duty levied on unbranded jewellery and come out with an “acceptable” solution, but won’t reduce import duty on gold and platinum, Finance Minister Pranab Mukherjee told lawmakers on Tuesday.

“I have no intention of causing any harassment (to small jewellers). As there have been a lot of representations, I am considering it (excise duty on unbranded jewellery). I will come out with an acceptable formulation,” said Mukherjee.[caption id=“attachment_257483” align=“alignleft” width=“380” caption=“Raging price. Reuters”]  [/caption]

A body representing jewellers had been hoping for the removal of 0.3 percent excise duty levied on unbranded jewellery in the budget, Baccharaj Bamalwa, chairman of All India Gems & Jewellery Trade Federation said.

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On 16 March, the government for the second time in 2012 doubled the import tax on gold bars, to 4 percent of value, triggering protest from jewellers.

The budget also proposed to levy one percent of tax collected at source for transactions valued at more than Rs 200,000.

“Strike will continue as the message is not clear,” said Bamalwa, referring to Mukherjee’s reply in parliament.

Jewellers’ strike entered its eleventh day on Tuesday, with most jewellery shops in Maharashtra and Gujarat planning to remain shut till 31 March. Retailers in rest of the country have called for an indefinite strike.

India is the world’s biggest consumer of the yellow metal, with an annual consumption of 900 tonnes. Shipments could fall by a third to 655 tonnes in 2012 as import duties crimp demand, a Reuters poll found.

India’s gold import bill, which stood at $46 billion last fiscal year, only next to petroleum, has been a cause of concern due to its impact on the country’s balance of payments.

Reuters