Indian Finance Minister Arun Jaitley has rejected protests against a 1% excise duty on non-silver jewelry that he proposed in his budget for the 2016-17 fiscal year which starts on April 1.
Jaitley told parliament that small traders would not have to pay the tax and would not face "harassment" by tax officials, adding that the tax would be levied on “principal traders” and not jewelry makers.
India jewelers have been losing an estimated $150 million a day in income due to the shutdown, the All India Gems & Jewellery Trade Federation which represents 300,000 jewelers and bullion dealers across the sub-continent.
The Federation is concerned that the new excise duty will hit the income of craftsmen and manufacturers.
There was a similar shutdown in 2012, when jewelers closed for three week. On that occasion, they succeeded in getting the previous government to drop plans for an excise duty.
The huge Indian diamond and jewelry trade has been disappointed overall with the budget proposals. They had been hoping for lower taxes that would persuade consumers to spend more.
Media reports out of India said that he requests to the government of the Gems and Jewellery Export Promotion Council (GJEPC) were almost completely ignored.
The GJEPC wanted a Special Turnover Tax regime for the diamond industry, with 0.75% tax on sales turnover similar to that which it said was the case in competitor states such as Belgium and Israel.
It had also called for the beginning of rough diamond sales at the new Special Notified Zone (SNZ) in Mumbai by implementing a 0.25% tax on sales turnover.
With thanks to Rachel Sahar.
