Gold prices
Gold pricesReuters

Despite an ongoing protest by jewellers over the proposed imposition of one percent excise duty on gold and diamond jewellery in the budget, the finance ministry has ruled out rolling back the duty. The ministry, instead, has showed readiness to resolve the issues the industry could face. 

An official from the India Bullion and Jewellers Association (IBJA) told the Business Standard that the ministry has invited their president to discuss measures how jewellers can benefit, while vouching that their future interaction with tax authorities does not amount to harassment. 

The ministry has also proposed to amend the rules to make sure jewellers are not subject to any friction with authorities, it said. 

In an interaction with International Business Times, India, one of the zonal chairmen of another umbrella association of jewellers, the All India Gems and Jewellery Trade Federation (GJF), had said it was not the tax issue per se but the authorities that the small jewellery manufacturers were concerned about. 

The chairman had complained that even as a pre-budget announcement of making PAN compulsory for every transaction above Rs two lakh was debated (in a country wherein 86 percent of the population does not have a PAN card), the government had set forth the excise tax department on small manufacturers. 

Read: 3-day jewellers' strike cost the economy $432 million

In an effort to ease the concern of these small manufacturers, the Central Board of Excise and Customs (CBEC) had also promised simplified compliance norms for jewellers who pay tax, reported the Mint

In a slew of confidence-building measures, the ministry had said its officers will not visit the premises of jewellery manufacturers. The jewellers were also given the option of centralised registration simplifying the process of separate registrations for all their premises, stated the Mint report.

The process of granting the registration was also narrowed down to two days and no post-registration physical verification of the premises was introduced, it said. Addressing another frequent qualm of jewellers to maintain a separate book to keep the excise duty taxes on track, the ministry even spared them from keeping such a separate record. 

Incidentally, it clarified about who constitutes to be called a 'small' manufacturer by explaining that the tax would be applicable only on jewellers with large turnover of more than Rs 12 Crore in the previous financial year. 

"Only if the turnover of a jeweller during the preceding financial year was more than Rs.12 crore, he will be liable to pay the excise duty. Jewellers having turnover below Rs 12 crore during preceding financial year will be eligible for exemption up to Rs 6 crore during next financial year. Such small jewellers will be eligible for exemptions up to Rs 50 lakh for the month of March 2016," the clarification specified. 

G.V. Sreedhar, chairman of the GJF, had said in a statement to the Mint: "The excise guidelines, which have been drafted for gems and jewellery, are not practically implementable and will be detrimental to the survival of the industry." 

Meanwhile, the IBJA, according to a Business Standard report dated March 14, would soon call for a meeting to discuss the invite by the ministry for further discussions on the issue. However, the association made it clear that the indefinite strike will continue till the excise duty was completely withdrawn.