VAT - OK... EXCISE - NOT OK !!

     Today, the Jewellers strike enters its 34^th day across the country. Huge banners have been put up in all the prime locations of main cities in India, about the imposition of excise duty on jewellery. In Mumbai, at each & every railway station, banners have been displayed about the imposition and of their determination to continue the strike until the levy is withdrawn.

     Since Budget-2016, several rounds of talks have taken place with various authorities and all apprehensions/fears of the jeweler community were clarified, right from the Hon’ble FM, Revenue Secretary, Chairman-CBEC, to the Chief Commissioners of the local Central Excise Zones, etc. Even then, it appears that the jewelers are not able to get over their apprehensions/fears.

     When the Govt. is very much clear about the levy and is granting them so many oppurtunites to have their fears addressed, and have even constituted a Sub-Committee, chaired by Dr. Ashok K. Lahiri, Chief Economic Adviser, Ministry of Finance & Company Affairs, Government of India, which will include 3 representative of the trade, one legal expert, one officer from the Ministry of Commerce and a high level officer from CBEC and is to submit their report within 60 days of the constitution of the committee. (Circular No. 1021/9/2016-CX dated 21-Mar-2016).

     All the trade associations are to be given an opportunity to submit representations before the sub-committee in writing and the all India associations to state their cause in person.

     Also, as per the above mentioned Board’s Circular, till the recommendations of the Sub-Committee are finalized, the following directions are to be adhered :

a)   All payments of central excise duty will be based on first sale invoice value;

b)   The central excise authorities will not challenge the valuation given in the invoice

provided the caratage / purity and weight of the gold/silver with precious stones; and

carats of diamond/precious stones are mentioned on the invoice;

c)   The central excise officers will not visit the manufacturing units/ shops/ place of

business/residence of the jewelers;

d)   No arrest or criminal prosecution of any jeweler will be done;

e)   No search or seizure of stocks by any central excise official will be effected;

f)    Exporters will be allowed to export on self-declaration and submission of LUT to

customs without the need to get LUT ratified by central excise. Prevailing system will

continue.

     The Govt. of India is so open to the concerns of the Jewellers’ and every apprehension raised were clarified, but still jewellers wants the Govt. to withdraw the levy. The prolonged agitation may become a subject in a Management Institute as to how the trade can sustain such a lengthy strike and how their low level employees/daily wage earners are still tight-lipped about how they are able to survive alongwith their families…

     What is their hidden agenda… what do they want to hide….and from whom…, when no one is asking them whether the jewellery is made from smuggled gold / stolen gold / whether the gold is purchased under bill.  They are also not being asked whether the artisans making the gold jewellery belongs to this country or otherwise.

     As on date, when majority of the jewelers are literate and computer savvy, what is the hitch to make all their transactions bonafide & legal. It is surprising to learn that they are subject to state VAT but are opposing levy of central excise duty.

     Historically, the Central Excise levy came into existence in 1944, on salt. Since then, so many industries and thereafter services have been included under Central Excise & Service tax. Now the Govt. is including some of the trades into its ambit.  The future tax regime will be document based as envisaged under GST and the Govt. is trying its best to set the ground for the easy rollout of GST in the future.

     Yesterday those who were in favour of GST, now they are opposing the levy on their trade !!

     Our Directorate of Publications & Publicity came out with several advertisements in the line of the Budget-2016 declarations. Our senior officers also held meetings with the trade and as well as press conferences in almost every city in the country, and tried to assure the jewelers about the good intentions of the Department, but it appears that all was in vain, and the strike continues.

     Blaming the Department and tarnishing its image will not yield any result except bitterness.  When the entry of officers into their premises/residences have been barred / no search, seizure or arrest is to be done, they have exemption upto Rs. 6 Crores (SSIs have exemption of only Rs. 3 Crores) what more do they require ?

     The jewelers should also realize that the Department has gone far ahead in terms of acceptance/adoption of technology from the days of Gold Control. Now, everything is online and can be accessed from anywhere over the internet – filing of Registrations, submission of Returns, duty payments are online and the requirement of interacting with the officers is totally reduced and may not be even required.

      As the advertisement says “Nation progresses when taxes are paid”, so, pay your taxes honestly and be a proud partner in our Nations’ progress !!

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