New Delhi:
In what is certain to be a major embarrassment for the Union government, Coal Minister Sriprakash Jaiswal has criticised the excise duty hike on jewellery announced in the Union Budget this year.
He attended a meeting in Kanpur expressing solidarity with the agitating jewellers; Mr Jaiswal even compared some government departments to mosquitoes sucking their blood.
"For only Rs 100 crore of revenue I realise how much you will have to go through. Like mosquitoes in the night, in our country there are some departments that also suck blood," he said.
Bullion and jewellery markets are protesting against the imposition of excise duty on unbranded jewellery and doubling of import duty on gold. Many jewellery shops are closed in various cities in protest.
The All India Sarafa Association recently wrote to Congress president and UPA chairperson Sonia Gandhi to look into the matter.
Way back in 1981-82, a similar step of imposition of excise duty on gold jewellery was proposed which had to be withdrawn, added the association president Sheel Chand Jain.
Traders are protesting against the budget proposal imposing excise duty of 1 per cent on unbranded precious jewellery and doubling of customs duty on standard gold bars and coins to 4 per cent.
Market sources claimed that the industry lost business of over Rs 10,000 crore in the first seven days, including Rs 750 crore on the auspicious day of 'Gudi Padwa" in Mumbai alone.
Retail jewellers brought under the excise net by the recent budget proposal were more worried and requested shifting of duty to another form.
"The imposition of excise duty will restrict business of small bullion traders by increasing paper work for maintaining records and tax formalities," said All India Jewellers Associations Forum President Sri Krishan Goyal.
Bullion traders in Kanpur also joined the strike as nearly 368 jewellery shops remained shut. Traders threatened to take to the streets if the Centre did not roll back the duty hike.
Uttar Pradesh Bullion Traders Association President Shyam Bihari Mishra said that new tax proposals would lead to rise of 'licence raj'.
"The proposed increase in import duty will lead to unchecked smuggling of the metal. This increase of import duty should be withdrawn in the larger interest of the trade and consumers," All India Sarafa Association President Sheel Chand Jain had said.
Traders warned that imposition of higher levies may lead to a rise in retail gold prices by over six per cent in the country, which is seeking to rein in a widening current account-deficit partly fuelled by record purchases in 2011.
Imports may fall over 35 per cent this year from a record 969 tonnes in 2011, while the industry might face more difficult time in coming days as marriage season begins, traders have said.
All India Bullion and Jewellers' Association said the proposed excise duty on jewellery would affect the business and needs elaborate book-keeping which could be a cumbersome process for jewellers.
"The duty will affect ordinary jewellers as their businesses are mostly small and family-owned. Therefore, the government should abolish the duty," it said in a statement.
Besides, the association is also urging the government to reduce the customs duty on gold to 2 per cent.