Jewellers called off an 18-day strike on Saturday, hours after the finance ministry said a rule imposing 1% excise duty on the sector that they were protesting against will not apply to artisans and job workers.
Jewellery shops were closed since March 2 against new norms announced in the general budget making 1% excise duty and PAN card for purchases of Rs 2 lakh or more mandatory.
On Saturday, following a meeting of representatives of jewellery industry with the revenue secretary, the finance ministry said: “Artisans and job workers are not covered (by) this duty and thus they are not required to take registration, pay duty, file returns and maintain any books of account.”
In case the jewellery is manufactured on job work basis, the liability to take registration, pay duty and file return is on the principal manufacturer and not on the job worker.
The government in the budget announced a nominal excise duty of 1% (without input tax credit) and 12.5% (with input tax credit) on articles of jewellery.
In a meeting with revenue secretary Hasmukh Adhia on Friday, jewellery industry representatives contended that reimposition of levy will bring back the regime of the erstwhile Gold Control Act leading to harassment of jewellers, especially artisans and small goldsmiths.
They are also worried that the levy would bring back the days of inspector raj and demanded that the exemption limit be increased to Rs 10 crore from Rs 6 crore in a year.
The ministry clarified that the exemption of excise duty up to the clearance limit of Rs 6 crore will be available to a jewellery manufacturer if his aggregate value of domestic clearances is less than Rs 12 crore in the preceding financial year.