Jain had walked into a dispute that erupted this week between the nation’s thousands of jewellers and Prime Minister Narendra Modi. “This one per cent levy as excise duty will further affect the industry”, Madras Jewellers and Diamond Merchants’ Association President Jayanthilal Challani told reporters here. Other traders in the city have also expressed solidarity with the jewellers.
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Gems and Jewellery Export Promotion Council Chairman Praveen Shanker Pandya said it was a good Budget overall, as the government has given a lot of incentives to SMEs and most of the manufacturing in the sector falls under this category.
IBJA will make a representation to the Finance Ministry with its demand to roll back the excise duty. “Therefore, to implement the excise duty the government will face a lot of problems”. Spot gold in London has rallied 17 per cent this year to US$1,241.32 (RM5,160) an ounce, outperforming other commodities on a resurgence in haven demand. “Today we are left with no options but to go for 72 hours’ token strike”, Ashok Minawala, an All India Gems and Jewelry Trade Federation (GJF) representative said in a statement late Tuesday. India buys nearly of the bullion it consumes from overseas.
The owners of Motisons Jewellers Limited, Sandeep Chhabra and Sanjay Chhabra said, “The one percent increase in excise duty has not only shattered the hopes of cut in import duty from ten percent to two percent but it will also create more trouble for jewellery industry”. While the import tax is stoking smuggling, it would be less cumbersome than the excise tax on the operations of local manufacturers, he said.
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Jaitley proposed 1 per cent excise duty on jewellery without input credit or 12.5 per cent with input tax credit on jewellery, excluding silver other than studded with diamonds and some other precious stones. Unofficial gold transactions have been rising since India made it mandatory for customers to disclose their tax code for high-value purchases. “This duty should be withdrawn in the larger interest of the industry and consumers”, Jain said.
