The Union Budget 2016-17 announced the imposition of Central Excise Duty on Gems & Jewellery industry, wherein the Govt. has imposed a 1% Excise Duty on Gems & Jewellery sector without input credit & 12.5% with input credit.
Please note that Gold Control act was introduced in the G&J sector in 1963 and it took the Government 27 years to realize that the act was not practical. Meanwhile, the industry and skilled artisans were suffocated during the period.
Likewise, Excise was introduced on branded jewellery in 2005 and later on withdrawn in 2008. It was re-imposed in 2012 and was withdrawn before the passing of finance bill. We fail to understand what is bothering the government to reintroduce it again. Does the Government wants Inspector Raj in this sector? Is this "Ease of doing business"?
The industry is already suffering due to Import Duty of 10% and the recently introduced PAN card limit of 2 lakh for Gems & Jewellery industry.
On one hand, Government plans to encourage skill labour, on the other, the new norms are creating unemployment for over two crore people, including goldsmiths and artisans, who have put their blood and sweat in building this industry. Karigars and artisans make beautiful Gold Jewellery at home, as such it is a handicraft industry, providing employment to millions of talented families. At present, the Excise Duty is imposed is on the bonded production area, with this provision the manufacturers will have to pay for producing the ornaments at home! Moreover, it is unrealistic to expect the small-scale workers of this handicraft of this industry to comply with the due diligence and other requirements proposed under the Excise Act. Don’t you think it is unfair for them to register for Excise?
The beautiful and traditional work of art, manufactured by these skilled artisans is the backbone of India’s Culture and Heritage. How can we allow the destruction of artisanship and heritage of the country due to the impractical and un-implementable norms?
The imposition on Excise Duty on Gems & Jewellery has the potential to destroy the industry, which has been nurtured for over 2000 years.
It is our humble request to the Government of India to give due consideration to the above facts and withdraw the application of Excise Duty imposed on Gems & Jewellery sector.