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GJEPC Expresses Dismay at Imposition of 1% Excise on Jewelry

The council supports GJF and other associations in their demand to roll back the excise tax on jewelry in Union Budget 2012.
Mar 27, 2012 6:01 AM   By GJEPC
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Press Release: In a ''survival or a rather politically safe'' budget, the finance minister had announced one-sided measures to control the forex reserves of the country by making gold and silver dearer for the consumer. It has been mentioned that one of the primary drivers of the current account deficit has been suspected to be the imports of gold and other precious metals in the first three quarters of this year. With the objective of checking this trend for better results, additional duties were announced and some of them have been doubled with the objective of limiting the imports of gold and silver. This has put the entire jewelry industry of India and the 3.5 million people, it directly employs, under great uncertainty for their future vis a vis such policy adopted.

Introduction of levy of excise duty of 1 percent on gold jewelry not bearing a brand name, along with existing 1 percent on branded precious metal jewelry

The Gem & Jewellery Export Promotion Council (GJEPC) earlier had already advised the government that imposition of such excise would be disastrous for the entire jewelry industry of India including exports, as excise is an ambiguous regulatory prerequisite for the Indian jewelers, which is difficult for mid-sized and small jewelers to comply and compete with.

Due to this, the Indian jewelry industry is certainly not averse to contributing in revenue to the government of India in any other form, but excise. The industry believes that there is already a steep rise in import duty of gold from around 1 percent in end 2011 to 4 percent, which though uncalled for and already criticized by GJEPC, has already taxed the industry by four times. With the financial year drawing to a close, such announcement of excise has also seen the exports of gold jewelry from domestic tariff area (DTA) to suffer drastically and create immense hardships for the jewelry exporters and those who also manufacture and trade domestically.

GJEPC has actively engaged with the government to bring clarity to application of such excise rules, which still remain unclear.  After the budget was announced on March 16, the GJEPC office bearers  met various government officials including the Tax Research Unit of the Finance Department and the Commerce Secretary and are thankful for the time given and sympathetic approach taken by them on the issue and is confident of finding an amicable solution.

"The roll back of excise duty on jewelry is the demand of the day put across by all jewelers in the country. We are aware that jewelers from each and every state of India have held protests and approached the local government to convey the same to the Ministry of Finance. It’s our apprehension as an industry that imposition of excise and increase of import duty on gold from 1 percent to 4 percent may lead to unscrupulous state of affairs and increased probabilities of trafficking of gold into the country through illegal channels,” said Rajiv Jain, GJEPC’s chairman. “We feel that introduction of excise is not necessary at this point of time as it was announced at the Union Budget by the Honorable Finance Minister that the Goods and Services Tax (GST) will be introduced in August 2012 and such excise duty imposed can be merged with the GST."

GJEPC is equally distressed as other stakeholders of the industry for such a harsh budget for the industry and supports All India Gems and Jewellery Trade Federation (GJF) and all other associations across the nation in their demand to roll back the announcement of excise on jewelry at Union Budget 2012.

GJEPC strongly urges and appeals to the government to remove tax related strangleholds that are preventing the industry from growing at a healthy and desired pace.

About GJEPC
The Gem & Jewellery Export Promotion Council is an all India apex body for gem and jewelry, representing 5,300 members. Set up in 1966, it operates under the supervision of the Ministry of Commerce & Industry, Government of India. More info on: www.gjepc.org

Rapaport News is not responsible for, and does not endorse, the content of any press release. Press releases are not written by us and are provided only as additional information for our clients.
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Tags: All India Gems and Jewellery Trade Federation, budget, Excise duty, GJEPC, GJF, gold, India, Jewelry, Rajiv Jain, Rapaport
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