Finance Minister's retort to Arvind Kejriwal on jewellers' stir: Abolish VAT on Gold

New Delhi: Turning tables on Delhi Chief Minister Arvind Kejriwal, who is supporting jewellers' stir against the imposition of excise duty, Finance Minister Arun Jaitley today said that the Delhi government should first abolish VAT on gold.

"I have read Chief Minister of National Capital Territory comments that luxury goods like gold should not be taxed. I will welcome it if Delhi first abolishes VAT on gold," he said while addressing annual session of industry body CII.

Gold traders, jewellers and artisans have been observing strike since March 2, demanding roll-back of the budgetary proposal saying that it has impacted their business.

Jaitley further said that while Kejriwal is supporting jewellers demand for withdrawal of excise duty of 1 per cent on luxury item like gold, the Delhi government taxes essential goods like skimmed milk and every alternate food product even mithai.

"The larger impact is going to be, if I keep a luxury item out of the proposed GST, then the standard rate of the GST itself will have to go up.

"Then for us to maintain that rate between 16-18 per cent will become extremely difficult if the luxury goods are to be kept out of the GST itself and therefore the debate has to mature to see what is the impact of each of steps on the larger interest of the economy itself," Jaitley said.

Kejriwal yesterday addressed the gathering of agitating jewellers saying that BJP governments are no longer with the trading community which had supported the party at the time of election.

BJP, in turn, had hit out at Kejriwal saying the AAP leader's comments were a result of the Finance Minister's defamation suit filed against him.

"Jaitley has filed a Rs 10-crore defamation case against him. These remarks are a result of that frustration," BJP Secretary Shrikant Sharma had said here.

Jaitley also asked the industry to play an important role in clearing anomalies regarding tax matters.

The government will undertake more tax reforms in the next two years to make India globally competitive economy, he added.

"I think taxation reform we have undertaken...Both in direct tax and indirect tax. I think that's an important agenda over next one or two years where we have to cover a lot of space as far as those areas are concerned.

It is that reasonable taxation which will make us competitive globally," he said.

The Finance Minister also expressed hope that the current year would be better than the last year as far as private sector investment are concerned.

"I hope this year will be less challenging then the last year. Hopefully, this year the private sector investment and business environment improves," he said