The national strike of jewellery traders against the levy of 1% excise on the manufacturing of gold and diamond jewellery, entered its fourth day on Saturday. The strike has caused a business loss of about Rs 3000 Crores, resulting in a revenue loss of about Rs 100 Crore in shape of custom duty and Rs 24 Crore as VAT.
Confederation of All India Traders (CAIT) national president B.C. Bhartia and secretary general Praveen Khandelwal said that levy of excise on gold and jewellery shall prove to be counter-productive and will badly hit the trade on one side, and will also cause loss of revenue to the Government. They had also urged Finance Minister Arun Jaitley to inititate a dialogue procedure with the body to end the stalemate.
“By this order, jewellers will not be able to keep jewellery worth more than Rs 2 lakh as they will be forced to submit their stock inventory to the department, which would lead to black marketing of jewellery as many small scale jewellers would not be able to furnish their stock. This will also increase excise harassment and the re-introduction of Inspector Raj,” said Rupesh Talla, a jeweller and member of the Jewellers Association of Delhi.
The Finance Ministry has also issued a clarification on the issue, saying that the 1% excise on manufacturing of gold and diamond would be applicable only for those whose turnover is more than Rs 12 Crore in the preceding financial year, and jewellers having turnover of below Rs 12 Crore during the preceding financial year will be eligible for exemption of upto Rs 6 crore in the next financial year.
The CAIT has welcomed this announcement. Praveen Khandelwal, general secretary of CAIT, said, “The announcement shows the seriousness of the Ministry to resolve this issue. But, the manufacturing is mostly done by small artisans and these artisans will not be able to comply with this order of the Ministry as the manufacturers, after adding their manufacturing cost, would fall under the Rs 12 Crore slab.”
Khandelwal is also wary of this order, as he believes such an order which puts taxation load would encourage smuggling and growth of unaccountable businesses. “When the government is committed to Goods and Services Tax (GST), I do not understand why an excise duty increase is announced in this budget. We call upon the Finance Minister to maintain status-quo till GST is implemented,” added Khandelwal.
The strike is likely to continue till 7 March after which the CAIT will take a decision on whether to continue the strike,