Pranab Mukherjee may rethink on gold excise duty.

NEW DELHI: Finance minister Pranab Mukherjee will provide some relief to the jewellery industry that has been agitating against imposition of excise duty on gold ornaments. He has promised an "acceptable formulation" indicating that the government may not withdraw the levy altogether.

Budget 2012-13 had proposed 1% excise duty on unbranded jewellery, increase in import duty and tax at source on cash jewellery purchases worth more than Rs 2 lakh. Jewellers, except those in Maharashtra and Gujarat, have called an indefinite strike against the proposal. The strike entered its 11th day on Tuesday.

"I have no intention of causing any harassment...All state governments charge value added tax on gold jewellery. As there have been a lot of representations, I am considering it," Mukherjee said in his reply to the general discussion on the Budget for 2012-13 in the Lok Sabha.

"I will come out with an acceptable formulation," he assured the house after some members raised the issue. The Central Board of Excise and Custom had earlier said that the effective excise duty on gold jewellery could be just Rs 90 per 10 gm and small goldsmiths will not face the hassle of registration for duty payment.

India is the world's biggest consumer of the yellow metal, with an annual consumption of over 900 tonnes. The country imported gold worth $46 billion last fiscal, nearly equivalent to its current account deficit, prompting policymakers to call for measures to curb its import.

On the demand for reducing import duty on gold that was hiked from 2% to 4% in the budget, Mukherjee said, "I know it (gold) is part of our culture" but added that the import of 'dead asset' results in wastage of precious foreign exchange. He also promised to reconsider a package for sericulture farmers.

Source : economictimes.indiatimes.com