New Delhi, Mar 27: Bowing to protests by jewellers and demands in Parliament, Finance Minister Pranab Mukherjee hinted at a roll back of the excise duty on unbranded jewellery but ruled out going back on the hike in import duty on gold and platinum.
He also promised to reconsider the proposal to make it mandatory the use of PAN card for purchase of jewellery of over Rs 2 lakh.
“I understand the plight of small jewellers ...I am considering it... the period that will be available from now and (passage of) Finance Bill, I will come out with an acceptable formulation”, Mukherjee said in his reply to the general discussion on the Budget for 2012-13 in the Lok Sabha.
He was referring to the decision to include unbranded jewellery in the ambit of one per cent excise duty on branded jewellery that led to protest and strikes by bullion dealers all over the country.
Asked by BJP leader Yashwant Sinha to give a commitment that the duty would take prospective effect and not not now now, Mukherjee said, “I will examine the demand but without going into the legal implications, I can't say anything.”
On the demand for reducing import duty on gold that was hiked from two to four per cent in the budget, he said, “I know it (gold) is part of our culture” but added that the import of “dead asset” results in wastage of precious foreign exchange. India imported gold worth USD 46 billion last fiscal, next only to crude oil.
He also promised to look into the demand for the reduction of import duty on raw silk taking into account the interests of weavers and sericulture farmers.
Mukherjee defended government's proposal to amend the Income Tax Act with retrospective effect in the wake of Supreme Court order in the Vodafone case but said there was no room for apprehension as cases beyond six years cannot be reopened.
“It does not mean all cases will be reopened from 1961 and 1962...where is the apprehension?”, he said. As per the IT Act, the government cannot reopen tax cases beyond six years, he said, adding the intent of legislature is that there should be no double taxation and also no outflow of revenue.
“India is not a no-tax country...India is not a tax haven”, he said, while referring to the Vodafone case in which the UK-based telecom major won a Rs 11,000 crore tax case in the Supreme Court.
The proposed IT amendment aims at taxing overseas mergers and acquisition relating to domestic assets with retrospective effect.
On General Anti Avoidance Rules (GAAR), which has evoked sharp reaction from industry, Mukherjee said, the idea behind the proposal is to prevent genereration of black money and not to harass honest tax payers.
He gave no indications of lowering taxes on crude saying “collective” action is needed outside the budgetary exercise to deal with the impact of spiralling prices of oil in the international market.
After the reply, the House passed the relevant approproation bills on vote on account, supplementary demands for 2011-12 and excess demands for grants completing the first phase of the three-stage budgetary process for 2012-13.