Govt eases jewellery tax norms, industry wants full exemption

Aamir H Kaki

The industry has welcomed the government decision to relax the norms for one percent excise duty on the sale of gold jewellery but wants to get it totally removed.

“We appreciate the relaxation given by the government for easing the norms of the excise duty for jewellers having a turnover of up to Rs.150 million,” Lala Satish Chand Singhvi, President of Delhi Jewellers Association told The Dollar Business Bureau.

“But we want the custom duty of one percent to be dropped completely,” he added.

In an attempt to address concerns raised by the industry, the government had announced on Wednesday that it has eased the norms for the excise duty on the sale of gold jewellery that was announced earlier this year.

As per the revised rules, the units having a turnover of up to Rs.150 million ($2.2 million) per year will be exempt from paying the excise duty of one percent, the government said in a statement. Previously, the exemption limit was for those jewellers who are having a turnover up to Rs.120 million.

The government has also said that in the initial 2 years, there will be no audit for jewellers whose payment of duty is below Rs.1 crore, that is, turnover of goods manufactured is less than Rs.100 crore.

There will be no search, visit and seizure at the premises of job workers and no visit to the principal jeweller’s premises, except if there is any specific intelligence and that too with the permission of the Commissioner or officer of equivalent rank, the government said in the new rules.

The jewellers in India, world's second largest gold consumer, went on strike for 6 weeks when the government imposed one percent excise duty from March onwards on gold jewellery. To look into the concerns of jewellers, the government created a panel and accepted its recommendation.