The government on Monday ruled out withdrawal of excise duty imposed in the Budget on jewellery despite the indefinite strike by jewellers entering the 13th day saying that it has been imposed in anticipation of goods and services tax (GST).
“GST will be rolled and gold will be there in that. The excise that has been imposed is a preparation of that,” finance minister Arun Jaitley said in Lok Sabha while replying to debate on the General Budget.
Later the Lower House passed the Budget 2016-17.The Budget had announced 12.5 per cent excise duty on jewellery if the credit for taxes paid on inputs is taken and 1 per cent if no credit is taken. The tax is on gold jewellery and silver is exempt unless it is studded with precious stones.
Since then jewellers have been up in arms demanding the rollback of the duty despite clarifications by the government that they would not be harassed and it would not have to be paid by small manufacturers who supply to other units.
They had even met finance minister to push for their demands saying that it would increase paperwork for them and add to the list of officials they would have to deal with.
In his speech in Parliament, Jaitley assured the jewellers that no inspector would visit them and taxes will be payable on the basis of turnover returns that they already file for paying value added tax or even their private records.
The entire tax would be based on self-certification and their returns would not be questioned, he added.The finance minister also said that the tax would not be collected from artisan on goldsmith who only manufacturers jewellery on job work and they would not have to register with excise authorities.
He also said only if the turnover of a jeweller during 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 unto Rs 6 crore during next financial year.
Defending his government from attack for coming out with a declaration scheme for domestic black money, Jaitley said it was not an amnesty scheme that the previous governments had announced.
He said anyone making declaration under the scheme would have to pay 30 per cent tax and 15 per cent penalty and was very different from last such scheme that came out in 1997 which allowed people with undeclared assets to pay tax on them at 1987 rates and no penalty.
Under the present scheme the tax would be levied on the present value of the asset so it is not an amnesty scheme, the finance minister said.
He also said that the budget for 2016-17 was a realistic budget that attempted to increase rural incomes and purchasing power while allocating more resources for infrastructure development.
