FM rules out rollback of excise duty on jewellery

New Delhi: Finance Minister Arun Jaitley today rejected demands, including from ally Shiv Sena, for rollback of one per cent excise duty on non-silver jewellery and asserted that jewellers will have to pay taxes.

He said in the Lok Sabha that the government had already constituted a committee over the issue and parliamentarians could give their suggestions to it so that rules related to it could be simplified.

"Tax will have to be paid. But we will ensure that there is no harassment of jewellers," Jaitley said during his reply to a discussion on the Finance Bill.

He also brushed aside the demand made by Deepender Hooda of Congress for exempting jewellers based in rural areas, saying the income threshold is so high for the jewellers eligible to pay the tax that those based in villages will no be covered by it.

Luxury goods like jewellery cannot be kept out of the purview of the one percent excise duty when the country was moving towards the GST regime, the minister said.

Jaitley also took a jibe at Congress over its concerns for the jewellers based in villages, noting it had come out with 80-20 scheme in 2012-13 to regulate gold import and questioned where its concern for them was then.

If Congress is concerned about tax on gold, then it should have decreased the 5 per cent VAT on it in Kerala when it is one per cent in other states, Jaitley said.

The government spends over Rs 2.5 lakh crore from its foreign exchange for the import of over 1100 tonnes of gold annually.

Ever since the levy of one per cent cess on non-silver jewellery was announced in the Budget, there have been protests by the jewellers and demands for rollback by MPs as well.

Even NDA ally Shiv Sena yesterday demanded the rollback, saying the government should shed its "ego" and decide on it as Prime Minister Narendra Modi had himself opposed levying it in the past.

"I do not understand the logic behind imposing excise duty on jewellery. Once GST comes in, central excise will get abolished then what is the necessity of imposing it now... Government should intropect it, it should be rolled back," Shiv Sena member Arvind Sawant said in the House yesterday.

Participating in the discussion on the Finance Bill, Sawant said the levy was imposed even earlier in 2005, 2012 and was withdrawn following protest.

"We were the people who opposed it, including the present Prime Minister... It should be rolled back... Just like the EPFO decision. There is no ego issue," he said.