Finance minister Pranab Mukherjee on Tuesday agreed to reconsider the proposal to impose excise duty on non-branded jewellery. He, however, declined to do away with the increase in import duty on gold and platinum.
In his reply during the discussion on Budget 2012-13 in the Lok Sabha, he said the decision on states' demand for additional compensation on account of central sales tax would critically depend on an agreed timeframe for the implementation of the Goods and Services tax .
Against the backdrop of a countrywide strike by jewellers, former finance minister Yashwant Sinha pressed for a rollback of the excise duty on non-branded jewellery and called for doing away with the requirement of a PAN card to buy jewellery worth Rs 2 lakh.
The Budget proposal to include unbranded jewellery in the ambit of one per cent excise duty on branded jewellery led to protest and strikes by bullion dealers all over the country.
Mukherjee said, "I understand the plight of small jewellers and an acceptable solution will be found." He, however, declined to give any detail of a possible solution. It is now expected the final decision on this issue would come as part of amendments to the Finance Bill.
On the demand for reducing import duty on gold, which was raised from two per cent to four per cent in the Budget, he said, "I know it (gold) is part of our culture". He added the import of "dead assets" result in wastage of precious foreign exchange. India imported gold worth $46 billion in the previous financial year.
The finance minister also dismissed apprehensions on the move to amend tax laws retrospectively, saying cases older than six years wouldn't be reopened. He said a clarification on the intent of the tax provisions had been made, as outlined by the Supreme Court in the Vodafone case. This didn't mean all cases from 1961 would be reopened, he added.
On a reduction in interest rates, he said RBI would, in consultation with the finance ministry, take appropriate steps. He also said the government was working on a special package for sericulture workers. Mukherjee also defended the Budget numbers and proposals and said these were formulated against the backdrop of the economic crisis in Europe and a slack recovery in the US.