Jaitley justifies levy on gold imports

Calling attention motion in Rajya Sabha with the government ruling out rollback of one percent excise duty on gold jewellery levied in the Union Budget, Finance Minister Arun Jaitley today said that gold cannot remain out of the tax net when goods used by the common people are being taxed.

Calling it a tax on luxury items, 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 during his speech in the Rajya Sabha.

He added that even imitation jewellery attracted six percent excise duty.

The Finance Minister reasoned that trade had not developed to the extent that annual turnovers of small jewellers had crossed Rs. six crore.

"This is implemented on big chains," he added while mentioning a few step towards implementation of the Goods And Services Tax (GST) Bill.

Maintaining that an 18 percent GST rate cannot be reached if luxury items were not taxed, he said the levy will be imposed only on corporate jewellers having a turnover of up to Rs. 12 crore last year.

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."

The jewellers had gone on a strike earlier to protest against the one percent tax imposition on gold imports.

Jaitley, however, today allayed the jewellers' fears citing there will be no physical verification, adding the tax can be paid on self-certification based on VAT returns.

The government has also formed a committee under former chief economic advisor Ashok Lahiri to address the jewellers concerns.