Excise duty on gold jewellery: Traders strike enters Day 17
April, 03rd 2012
The nationwide strike by jewellers and bullion traders against the imposition of excise duty on unbranded jewellery entered its 17th day on Monday as traders and small artisans participated in a demonstration at Jantar Mantar. The traders vowed to keep their shutters closed until the duty is rolled back. The loss to the industry and loss of taxation revenue to the government has only been increasing with each passing day of the strike.
Vimal Kumar Goel, president of Delhi Bullion and Jewellers Association, estimates that the gold, diamond and silver jewellery industry nationwide has suffered a turnover loss of about Rs 22,000 crore. In Delhi alone, he pegs the figures at Rs 350 to 400 crore per day. "Even the government has lost out on several hundred crores in revenue from custom duty, VAT and income tax. In the same frame of time, they would have fetched only about Rs 25 crore from excise duty," says Goel.
The excise tax of one per cent on unbranded jewellery, proposed in the new budget by finance minister Pranab Mukherjee on March 16, was implemented on Sunday when the new financial year kicked in. Despite an assurance by the finance minister to consider their requests when the Finance Bill will be passed on April 24, industry players have refused to back down. They have already scheduled a series of nationwide demonstrations, including one at Ramlila Maidan on April 10, in which about five lakh traders from across the country are expected to participate.
Clarifying the industry's position on the issue, Rajat Jain, member of Gold Jewellery Federation and Karol Bagh Jewellers' Association, says the government had already increased custom duty from one to four per cent in three months. "We are not against taxation, but we don't want another department under which we will be taxed. "Excise tax requires a lot of paperwork and documentation that needs to be submitted to the government every month, which small artisans cannot afford. Under excise tax, criminal proceedings can also be taken for lack of records, which means that even if a person is in possession of an ancestral gold jewellery item without necessary documents, they can be charged," says Jain. Goel says that there are six or seven stages of creating jewellery, each involving different artisans. "The excise tax means that we will need an accounting system at every stage," he says.