Jewellery Sector Contributes To Black Money: CBEC Chief

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Despite the ongoing jewellers' strike to protest against reimposition of 1 per cent excise duty on gold and diamond jewellery, CBEC today said the sector contributes to generation of black money and needs to be brought under the tax ambit.

"We have brought jewellery (sector) into the tax net. This is the levy which we had attempted two years ago and withdrawn... This is the sector which you will agree with me needs to be brought into tax needs," Chairman of the Central Board of Excise and Customs (CBEC), Najib Shah today said at an event organised by industry body Assocham. "This is a sector which lends itself to generation of unaccounted wealth."

Jewellery Sector Contributes To Black Money: CBEC Chief
Finance Minister Arun Jaitley in the Budget for 2016-17 had proposed 1 per cent excise duty on jewellery without input credit or 12.5 per cent with input tax credit on jewellery excluding silver other than studded with diamonds and some other precious stones. Jewellers are on a three-day pan-India strike to protest against the proposed re-introduction of 1 per cent excise duty on gold and diamond jewellery and mandatory quoting of PAN by consumers for transaction of Rs 2 lakh and above. Shah noted: "... manufacturing sector contributes 17 per cent of GDP. We have a huge chunk of industry which is out of the tax net."

The CBEC chairman said the revenue department will take a hit of Rs 1,000 crore due to the change in CENVAT credit rules. "But we thought it is essential because the cost of litigation for you and me are much more than revenue which otherwise we have got," he said. Noting that the government has increased some duties, Shah said it's done so to create a level-playing field for Indian industries as was the case in defence. He urged industries to stop demanding exemptions to avail of goods and services tax (GST). "If you want GST, you should not demand exemptions because two don't go together," Shah said.


Read more about: gold
Story first published: Thursday, March 3, 2016, 14:30 [IST]
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