Finance Bill 2016: Jaitley rules out 1% tax on gold
Reiterating the stand of the government, Finance minister Arun Jaitley on Thursday ruled out roll back of 1% excise on non-silver jewellery, saying the levy was not applicable on small traders and artisans and only jewellers with more than Rs 12 crore turnover will attract the duty.business Updated: May 06, 2016 00:20 IST
Finance minister Arun Jaitley on Thursday reiterated that the government will not roll back the 1% excise on non-silver jewellery and said the levy was not applicable on small traders and artisans and only jewellers with more than Rs 12 crore turnover will attract the duty.
“I have not been able to understand the politics of hatred for ‘suit’ but the love for gold,” Jaitley said while replying to a debate on the Finance Bill 2016 as he took potshots at Congress, which is opposing the levy of excise duty.
The Finance Bill was passed in the Lok Sabha.
The finance minister proposed excise duty of 1% on jewellery without input credit or 12.5% with input tax credit on articles of jewellery, excluding silver jewellery other than those studded with diamonds and some other precious stones. The government move is aimed at bringing the gems and jewellery industry that is still largely an unorganised sector into the tax net.
The jewellers and bullion traders in the country responded by launching a nationwide strike for more than 40 days.
The government has set up a committee under former chief economic advisor Ashok Lahiri to look into the demand of agitating jewellers and also into their grievances with regard to compliance and operating procedures for payment of excise duty.
The government refused to budge from its stance as Jaitley clarified in Parliament late last month that gold cannot remain out of the tax net when goods used by common people were being taxed.
Political parties including ally Shiv Sena, Telangana Rashtra Samithi (TRS) and the Trinamool Congress have also opposed the government’s move saying small artisans are facing harassment because of the levy.
The Shiv Sena had said in Parliament that the levy was imposed even earlier in 2005, 2012 and was withdrawn following protests.
“I do not understand the logic behind imposing excise duty on jewellery. Once GST comes in, central excise will get abolished then what is the necessity of imposing it now ... The government should introspect it, it should be rolled back,” Sena’s Arvind Sawant said during the discussion on the Finance Bill in the Lok Sabha on Wednesday.
“We were the people who opposed it, including the present Prime Minister ... It should be rolled back ... There is no ego issue,” he said.
During the discussion, Jaitley also said the tax notices have been sent to all those who were named in the Panama Paper that revealed offshore companies were set up by politicians, actors, businessmen and others across the world to stash illegal money abroad.
Over 500 Indians were named in the expose by the International Consortium of Investigative Journalists (ICIJ) and over 100 global media organisations in their investigation.
Addressing the bad loans situation, Jaitley said the non-performing assets (NPAs) of banks is an issue of “concern”.
“Hiding NPAs will not resolve the problem and they should be reflected in balance sheets and addressed through capitalisation,” the minister said.
The government shall bring the banks out of the NPA mess, he said.
Bad debts have hampered banks’ ability to lend and are becoming a road block in the revival of the economy. India’s $121 billion troubled debt pile, over $100 billion of which is on the books of state-owned banks, has come under close scrutiny from prosecutors, the media and politicians.
Jaitley also said it is difficult to say how long global headwinds would persist, but Indian economy is doing much better than others. India continues to maintain a high growth rate at 7.65% in 2015-16 compared to 7.2% in 2014-15, he added.
He further expressed confidence in the growth projections for the country, saying “good monsoon will aid in accelerating economic growth.”
After two years of drought, if the forecast of better monsoon rains this year holds good, it will improve agriculture and raise rural income, he said.
“The economy, which had been expanding on the strength of public investment, highest foreign direct investment (FDI) and urban demand, can grow faster if rural demand is added,” he said.
Indian economy is projected to grow by 7.5% in the current year. Latest forecasts predict above-average rainfall in India after two years of drought.
(With inputs from PTI)