Lux­ury Item Like Gold Jew­ellery Can’t Stay Out of Tax Net: Jait­ley

Says items used by com­mon peo­ple are be­ing taxed, rules out roll­back of 1% ex­cise duty

The Economic Times - - Economy: Macro, Micro & More - Our Bureau

New Delhi: The gov­ern­ment has ruled out roll­back of 1% ex­cise duty on gold jew­ellery levied in the bud­get, call­ing it a tax on a lux­ury item. Fi­nance min­is­ter Arun Jait­ley said gold can­not re­main out of the tax net when goods used by com­mon peo­ple were be­ing taxed. Jait­ley re­ferred to items like soap, tooth­paste, ra­zor, pen­cil, ink, fruit juices and baby food at­tract­ing ex­cise duty. “Why should the lux­ury items be ex­empted from tax,” he said, re­spond­ing to a call­ing at­ten­tion mo­tion in Ra­jya Sabha. He added that even imi­ta­tion jew­ellery at­tracted 6% ex­cise duty. Rub­bish­ing Congress leader Raj Bab­bar’s charge that gov­ern­ment was killing the trade and hurt­ing lo­cal ar­ti­sans, the fi­nance min­is­ter rea­soned that trade had not de­vel­oped to the ex­tent that an­nual turnovers of small jew­ellers had crossed .₹ 6 crore. “This is im­ple­mented on big chains,” he said, adding it was a step to­wards im­ple­men­ta­tion of the goods and ser­vices tax (GST). Main­tain­ing that a 18% GST rate can­not be reached if lux­ury items were not taxed, he said the levy will be im­posed only on cor­po­rate jew­ellers hav­ing a tur­over of up to .₹ 12 crore last year. “Small jew­ellers and ar­ti­sans are not cov­ered within the am­bit of this levy,” FM said

While re­fer­ring to states levy­ing value added tax (VAT) on jew­ellery, Jait­ley said if states felt the levy was not in or­der they should first re­move VAT. “Each state im­poses VAT on gold and in Ker­ala it is as high as 5%. If you (op­po­si­tion) are so much con­cerned then get it re-

VAT ON GOLD

moved from Ker­ala,” he said.

Jait­ley re­called that the UPA regime had im­posed taxes on jew­ellery in 2005 and with­drawn it in 2009 in face of stiff op­po­si­tion. It again im­posed it in 2012 but the de­ci­sion was rolled back again. Miffed Congress and Sa­ma­jwadi Party staged a walk­out from the House.

Stick­ing to his de­ci­sion, the min­is­ter added, “We have to de­cide on which items we will im­pose ex­cise duty and if there is any struc­tured trade, they do not get the right to re­sort to ag­i­ta­tion against tax.”

Jew­ellers have been on strike since the bud­get protest­ing against the levy on the grounds that

AL­LAY­ING FEARS

it will lead to ha­rass­ment. He al­layed jew­ellers’ fears cit­ing there will be no phys­i­cal ver­i­fi­ca­tion and tax can be paid on self-cer­ti­fi­ca­tion based on VAT re­turns.

“If any ex­cise of­fi­cial or khakidressed man har­rasses, jew­eller just needs to click a snap on their mo­bile and send it to me,” fi­nance min­is­ter said.

The gov­ern­ment has also formed a com­mit­tee un­der for­mer Chief Eco­nomic Ad­vi­sor Ashok Lahiri that would also in­clude three rep­re­sen­ta­tives of jew­ellers to ad­dress their con­cerns.

So far, 206 jew­ellers have reg­is­tered and the dead­line for it has been ex­tended till June 30 from March 31.

Fi­nance min­is­ter says move cru­cial to im­ple­ment Goods and Ser­vices Tax

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