Wednesday, May 20, 2020
Sunday, April 10, 2016
The topic is Excise on Gold JEWELLERY...!!!
Yes on JEWELLERY! A Handloom/Handicraft industry.
Which has brought laurels to India's craftsmanship and artistry since times immemorable.
And most of the media has been dumb in last 39 days strike.
No weightage is given to this issue so far despite long peaceful strike.
Whereas government rapidly considered Jat for a reservation after violent stir.
That shows how government pays a heed to sensitive issues.
There are many supporting clauses from the government side to support their view on excise.
They would have been anyways, because they have a fully loaded machinery to do so and levy whatever they feel to do.
On the otherside the Jewellery industry, who was not prepared for such a sudden lash on to it, has to first consider all points and consequences of this unclear levy and then respond. Which makes it vulnerable at many points
People have been mocking jewellers and also painting jewellery industry in black, without knowing the full story. They are right as they only know what is delivered to them via state sponsored/controlled media.
So here we will be trying to bring the actual picture...! As to why jewellers are instigated.
We will try to clear certain doubts that get lost in actual debates, on a point to point basis.
1) Excise is important, Gold jewellery is a luxury item and cant be kept untaxed.
Answer:- Gold is not untaxed. Its is heavily taxed already. More than 90% of indigenous demand of gold is met through import. There is an import duty of 10% !! Thats not enough, then wait, Gold Jeweller has to deal with a whole lot of taxes like VAT, cess, Service tax, Income tax, professional tax, wealth tax etc..!
Jewellery is not a luxury. Indian traditions bound every household to buy gold/silver jewellery according to its status. Even Income tax laws consider Jewellery as an essential 'streedhan' .
Ok beyond that legal limit of 'streedhan' can be considered luxury. But you are already taxing it heavily.
Why excise only? thats only what was actually left to be levied.
2) India imports 1000 tonnes annualy (aprox.) and there is record for only 300 tonnes, where does the remaining 700 tonnes goes!
Answer:- This is the main problem and here lies the solution itself.
Don't tax jewellery. Anyone with black money will not buy gold jewellery which is already taxed upto 15-20% and pay additional making charges of approximately 10-20 % more (total comes out to be 25-40%) just to hide his black money.
Infact black money holder will buy real estate or gold bullion.
Yes gold bullion. Tax that instead. But govt. has kept that out of the ambit.
There is where the major portion of shadowy 700 tonnes might be going. But might be that frustrate higher authorities as they have most of the black money, and dont want to close that avenue for themselves. There is no use of squeezing poor manufacturers. Problem is up there and not down under.
3) Excise is kept at a nominal rate just to check Black Money
Answer- Excise is already in many fields and industries, are they working streamlined without any leakages, minus any corruption? Are those businesses not harrassed by excise officials? Excise babus are the most corrupt. When govt itself says that no official will harass jewellers, it itself is acknowledging the real problem! Problem is who buying the gold bullion and not who selling gold jewellery! Jewellers are not the culprit, infact big businesses, celebrities, ministers, land mafia etc. are. Even govt acknowledges this. Jewellers are ready to sell all stuff on bank checks, but are people ready to buy in white? Is there an infrastructure in place with PAN cards, adhar, IT Payees in place yet? First those things need an attention. Others will fall in tandem automatically.
4) No excise official will visit premises of jewellers.
Answer- There is no clear notification by FM regarding this. Such an assurance is there only on FM's circular dated 21st March, 2016 , which says on forming a committee to look into jewellers concern and submit a report in 60 days. And the said relaxation is only for those 60 days. What after that?
How will an excise babu ensure that the return filed is legitimate. Will he take orders from FM before going to any jeweller? Or FM is going to make certain special amendments to its general excise law to give relaxation to jewellers? Its not going to happen.
5) Gold sold is impure
Answer- People buy gold from family jewellers, and if they found themselves been cheated so far then they wont be visiting the same jeweller for decades to buy jewellery. But still 2-5% of bad people are there in any field. All can't be painted red. Most Jeweller community not opposing mandatory hallmark bill. Its rather a way to retain customer's trust.Thats an opportunity not a burden for jewellers. We as jeweller community are not adamant on this issue. Infact all big jewellers already selling hallmark jewellery themselves.
6) Excise is easy and online
Answer- Even income tax, VAT etc are online but still people have to pay bribes to babus and keep all records and suffer harrassment. Basic phobia for jewellers is the harrassment on the hands of another department. All mature jewellers remember the Gold control act era from 1960's to 1990's.
7) TDS on sales of and/or above Rs 2 lakhs.
Answer- This is very petty amount considering the price of gold. This needs to be kept to the previous level of Rs 5 lakhs so that every citizen feels safe to buy jewellery and buy it in white without the fear of been caught by tax officials. That will create a more open economy and people will easily move to white transactions.
8) Excise on gold jewellery is a move towards GST
Answer- Gold jewellery can be moved into GST format without bringing it under excise. There is no such provision that you have to first move it into excise before bringng in GST! This is ridiculous. You want to keep Gold Jewellery in the higher bracket of GST, you can do so, no problem. But you dont need to first move it into excise and cause so much touble.
Monday, April 13, 2015
DEFINITION of 'Precious Metals'
A classification of metals that are considered to be rare and/or have a high economic value. The higher relative values of these metals are driven by various factors including their rarity, uses in industrial processes and use as an investment commodity.
Precious metals include, but are not limited to: gold, silver, platinum, iridium, rhodium and palladium.