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India Govt. Dismisses Revoking Jewelry Excise Duty

Mar 20, 2012 5:59 AM   By Dilipp S Nag
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RAPAPORT... India's Central Board of Excise and Customs (CBEC) has ruled out rolling back the 1 percent excise duty on jewelry as proposed in the Union Budget for 2012-13. CBEC stated that the effective tax rate is marginal and stressed that the government needs to raise more resources to fund its subsidies bill.

“We will soon issue clarifications and there should be no apprehension in this regard,” said S.K. Goel, the CBEC chairman,  while addressing a post-budget seminar organized by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

He explained that the effective excise duty on jewelry could be in the range of $1.80 (INR 90) per 10 grams and that small artisans who design and create jewelry for goldsmiths will not have to face the hassle of registration for duty payment.

Bullion traders are unhappy over the extension of the 1 percent excise duty to unbranded precious metal jewelry and have threatened to declare an indefinite strike over the issue. The government has also doubled the import duty on gold to 4 percent. India, the world's largest consumer of gold, imported 967 tonnes of the precious metal in 2011.

The government has proposed that a jeweler should collect 1 percent tax from every buyer in sales above $3,985 (INR 200,000) to reduce the quantum of cash transactions in bullion and in the jewelry sector, and as a means to curb the flow of unaccounted money in the trade.

Goel stated that the 2012-13 budget was guided by the declining gross domestic product (GDP) growth rate, expected to be 6.9 percent in the current financial year, and the need for fiscal consolidation. Domestic manufacturing, agriculture, power, mining and textile sectors need to be encouraged, and the budget aims towards it, he said.
Tags: ASSOCHAM, budget, CBEC, Central Board of Excise and Customs, Dilipp S Nag, Duty, Excise duty, gold, Import, India, jewellery, Jewelry, Rapaport, silver, tax, Union Budget
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