New Delhi, May 7 (ANI): Finance Minister Pranab Mukherjee on Monday retracted the decision to impose one percent central excise duty on unbranded precious metal jewellery, thereby bringing a big respite to the protesting jewellers' community.
Mukherjee had last month said that he would consider the jewelers' demands to roll back the excise duty and provide an 'acceptable solution'.
Addressing the Parliament as he introduced in the finance bill, Mukherjee said that although the decision was 'well intentioned', the overwhelming criticism for the proposal, both inside the House and by the jewellers community forced the government to take it back.
"In respect of Customs and Central excise a related proposal that has attracted public attention is the imposition of Central Excise duty on unbranded precious metal jewellery at the rate of one percent. Mr. Chairman sir, I would like to reiterate that the levy was well-intentioned and introduced not so much for raising revenue as for rationalization and movement towards GST," said Mukherjee.
"However, the outpouring of sentiment both within and outside the House indicates that we are not ready for it. As such, the government has decided to withdraw the levy on all precious metal jewellery, branded or unbranded, with effect from March 17, 2012," he added.
Jewellers have been protesting against the excise levy on unbranded jewellery of 0.3 percent, and a tax collected at source on transactions worth more than 200,000 rupees.
The annual budget also doubled import duty on gold to 4 percent.
The duties could dent India's gold imports by a third to 655 tonnes in 2012, allowing China to overtake it as the biggest gold importer.
India delayed by one year the introduction of measures to crack down on tax evasion on Monday, moving to mollify overseas investors whose panic has led to a dramatic exodus of funds and hammered the rupee.
The proposals aim to target tax evaders through a General Anti-Avoidance Rules (GAAR), cracking down on the abuse of tax havens.
"To provide more time to both taxpayers and the tax administration to address all related issues, I propose to defer the applicability of the GAAR provisions by one year. The GAAR provisions will now apply to income of Financial Year 2013-14 and subsequent years," Mukherjee added.
The Finance Minister further said that a committee had been constituted under the Chairmanship of the Director General of Income Tax (International Taxation) to give recommendations for formulating the rules and guidelines for implementation of the GAAR provisions.
"To provide greater clarity and certainty in the matters relating to GAAR, a Committee has been constituted under the Chairmanship of the Director General of Income Tax (International Taxation) to give recommendations for formulating the rules and guidelines for implementation of the GAAR provisions and to suggest safeguards so that these provisions are not applied indiscriminately," he said. (ANI)
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