India sets up committee to look into jewelleres’ complaints after strike ends

The government has set up a committee to interact with trade and industry on tax laws after jewellers ended their 19-day strike to protest against the imposition of excise duty on all articles of jewellery in the latest budget.

It said the committee, which will give its report in two months, will be headed by Dr Ashok Lahiri and will have industry representatives and legal experts to look into issues related to compliance procedures for the new duty.

The government said in a statement the following rules will be adhered to until the committee’s recommendations are finalised to ensure jewellers are not harassed by tax authorities:

a) All payments of Central Excise duty will be based on first sale invoice value;
b) The Central Excise authorities will not challenge the valuation given in the invoice provided the caratage / purity and weight of the gold/silver with precious stones; and carats of diamond/precious stones are mentioned on the invoice;
c) The Central Excise Officers will not visit the manufacturing units/ shops/ place of business/residence of the jewellers;
d) No arrest or criminal prosecution of any jeweller will be done;
e) No search or seizure of stocks by any central excise official will be effected;
f) Exporters will be allowed to export on self-declaration and submission of LUT to customs without the need to get LUT ratified by central excise. Prevailing system will continue.

Jewellers in the world’s second-biggest gold consumer went on a strike early March after the government re-introduced the one percent excise duty on gold jewellery after four years in its attempt to curb India’s massive appetite for the yellow metal.

India imports about 1,000 tonnes of gold annually, accounting for a quarter of its trade deficit, forcing the government earlier to launch a monetisation scheme in its attempt to bring out more than 20,000 tonnes that is lying locked in lockers and temples. The scheme has not been popular.

 

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