Jewellers disappointed as govt proposes 1% excise duty

The gems and jewellery sector has expressed disappointment over the government's proposal to impose 1 per cent excise duty in Budget 2016-17, saying the issue of mandatory PAN card was also not addressed.
Finance Minister Arun Jaitley today 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.
"We are disappointed with the Budget. The proposed 1 per cent excise duty will reduce the ease of doing business as the gems and jewellery sector consists of less educated but highly skilled manpower, who are not equipped to deal with the cumbersome process required for it," All India Gems and Jewellery Federation (GJF) Chairman Sreedhar G V told PTI.

He said the proposal will affect the sector, which is already grappling with challenges after the government's decision to make PAN cards mandatory for any transactions of Rs 2 lakh and above in January.
Echoing similar views, India Bullion and Jewellers Association said the levy will create more trouble and make jewellery dearer. IBJA will make a representation to the Finance Ministry with its demand to roll back the excise duty.
Riddisiddhi Bullions MD Prithviraj Kothari said, overall, it was an average Budget for bullion industry as not much modifications was made as far the policies and regimes are concerned.

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.

Madras Jewellers and Diamond Merchants' Association President Jayanthilal Challani said the proposal to levy one per cent excise duty would create an additional burden on trade which was already suffering.
World Gold Council India Managing Director Somasundaram PR said at a broader level, the Budget is positive as it focuses particularly on the farm sector and the rural economy, which are the primary drivers of gold demand.

"A doubling of rural incomes by 2022 would provide a significant opportunity, as gold remains a preferred option for wealth preservation and will remain so amongst millions of people," he pointed out.