Protesting bullion traders and jewellers on Friday agreed to temporarily end their strike, which lasted 21 days and led to an estimated loss of Rs 20,000 crore to business and Rs 700 crore to the exchequer. The decision was taken by the agitators after an indication came from the finance ministry that the excise duty on non-branded jewellery, as proposed in the Union Budget, was likely to be rolled back at the time of debate on the Finance Bill in Parliament around May 7. They would take a final call on the strike on May 11.
The indications came after political pressure from the ruling Congress, too, came in favour of the jewellers’ demand.
Various bullion traders’ and jewellers’ bodies met UPA Chairperson Sonia Gandhi and Finance Minister Pranab Mukherjee to press their demands, including withdrawal of one per cent excise duty on non-branded jewellery.
After the meeting, finance ministry officials said various representations had come to the ministry for the rollback of excise duty on non-branded jewellery and these would be considered when the Finance Bill comes up for debate in Parliament.
“We have notified all members to call off the agitation with immediate effect,” Dinesh Jain, director of the governing board of the All India Gems and Jewellery Trade Federation (AIGJF), said. AIGJF Chairman Bachhraj Bamalwa said he could infer from what the finance minister spoke that the duty would be rolled back.
However, after the meeting, Gems & Jewellery Export Promotion Council (GJEPC) Chairman Rajiv Jain said the minister had categorically denied any consideration on withdrawing an increase in Customs duty on gold, as he wanted to discourage gold imports.
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Mukherjee had doubled the Customs duty in the Budget to four per cent from the two per cent earlier. Before that, the duty had been increased from one per cent to two per cent on January 17 this year.
According to Central Board of Excise and Customs (CBEC) Chairman S K Goel, the minister told the bullion traders and jewellers in the meeting that he would address their concern. “Wait for the Finance Bill. Whatsoever decision I have to take will be taken in that,” the minister is understood to have said.
Earlier in the day, agitating jewellers and bullion traders met the UPA chairperson, too. All India Swarankar Sangh President Madhukar Chachad told reporters: “(She) has assured us that she will forward our demands to Finance Minister Pranab Mukherjee for further action.”
Ahead of the meeting of jewellers with Gandhi, the Congress had asked the government to look into the jewellers’ demands. “The Congress party has asked the government to consider the demand of jewellers sympathetically,” secretary Janardhan Dwivedi had said earlier in the day.
Bullion traders and jewellers had been on a strike since March 16, following the presentation of the Union Budget the previous day.
The Budget had also reduced the threshold on tax collection at source (TCS) on the jewellery sale. GJEPC’s Jain added: “Mukherjee has also assured us that threshold on TCS, which was brought down from the level of Rs 5 lakh to Rs 2 lakh in the Union Budget, would be taken back to the previous level.”
Former AIGJF chairman Vinod Hayagriv said the FM had issued instructions that action should not be taken for non-payment of excise duty on non-branded jewellery till the Finance Bill was passed.
The size of the jewellery industry in India is estimated at Rs 3,00,000 crore, of which non-branded jewellery accounts for 94 per cent.