Though the postponement of the General Anti-Avoidance Rules (GAAR) was the biggest concession Finance Minister Pranab Mukherjee made in the Finance Bill, 2012-13, it was the rollback of a one per cent excise duty levy that political parties were more excited about. These even competed against each other to take credit for the move.
The entire opposition had virtually implored the finance minister to roll back the one per cent tax on unbranded gold jewellery. Political parties had also participated in a 21-day strike by jewellers against the move. So vehement was opposition to the move that demonstrations by jewellers in Ahmedabad had to be lathicharged and delegations of jewellers’ associations across the country met every political leader they could, including Congress president Sonia Gandhi, Dravida Munnetra Kazhagam (DMK) chief M Karunanidhi and Trinamool Congress chief Mamata Banerjee, to ask them to raise the rollback issue.
Today, all parties claimed credit for the finance minister’s announcement of rolling back the tax. The Bharatiya Janata Party (BJP) expressed satisfaction that the pressure exerted by it had led the government to withdraw the duty. Several Congress leaders said the party had acted on the words of party president Sonia Gandhi, while the DMK said it was because of the pressure it had exerted on the government that the levy had been cancelled.
Opening the debate on Finance Bill, 2012-13, BJP leader Yashwant Sinha said the finance minister had heeded calls from all corners of the House to withdraw the duty. However, he asked what would be done to the duty paid between March 16 and May 7? He said, “Jewellers are coming to us and showing us notices for excise duty already issued by the tax department. If the government levies the tax, then refunds will have to be paid.” He sought a clarification from the government on the issue.
The BJP-led Confederation of All India Traders (CAIT) and the Delhi Bullion & Jewellers Association (DBJA) also supported the move. “The step taken by the finance minister is a step forward in mitigating genuine problems of lakhs of jewellery traders in the country, along with crores of people dependent on the trade for their livelihood,” said CAIT Secretary General Praveen Khandelwal and DBJA President Vimal Goel.