By IANS,
Kolkata : The gems and jewellery sector is disappointed at the imposition of a one percent excise duty on branded jewellery in the general budget and the continuation of income tax rather than turnover tax for diamond merchants, an industry leader said Monday.
“In 2007, a one percent excise duty on diamond jewellery was imposed. But it was rolled back in 2009. Again this year it has been levied. If it could be rolled back in 2009, I fail to understand why it has been imposed again,” Pankaj Parekh, Gems and Jewellery Export Promotion Council chairman for eastern region, said.
He said that while only five percent of gems and jewellery makers were into branded jewellery, “there are many more willing to come out with their own brand, and the excise duty will be a deterrence for them”.
According to Parekh, the industry had also been expecting levy of turnover tax instead of the prevailing system of imposing income tax on diamond merchants as it was holding back many foreign firms.
“In countries like Belgium and Israel, diamond makers are charged turnover tax. Foreign diamond makers are hesitant to come to India as they fear they will have dispute with the income tax department,” Parekh told IANS.
Finance Minister Pranab Mukherjee said in his budget speech Monday that “a nominal central excise duty of 1 percent is being imposed on the 130 items that are entering the tax net”.
“In case of jewellery and articles of gold, silver and precious metals, the levy would apply only to goods sold under a brand name.”