Malabar Gold & Diamonds - A Note on budget 2016

Dubai, UAE, March 1, 2016: The Government has disappointed us in this year's budget . The union budget 2016 proposed to levy 1 per cent excise duty on jewellery without input credit or 12.5 per cent excise with input credit. Levying of excise duty on jewellery industry will create more trouble for this industry which is already starving. While the cost of jewellery will go up it will be very difficult for the government to implement the excise duty. Jewellery in India is not machine made and are mostly handcrafted. Therefore, to implement the excise duty the government will face a lot of problem. Some jewellers will absorb the excise while a large section of them will pass it on to the consumers. It comes as a blow to the industry which was hoping for a cut in import duty on gold from 10 percent to 2 percent .  , The Industry  had already  expressed dissatisfaction over imposition of the PAN Card requirement on any transaction over Rs. 2 lakh. This is not practical and will discriminate 70 per cent of the rural buyers as they are not under tax net and do not have PAN card. The high import duties have promoted smuggling and this new measure shall in no way stop generation of black money.  There are about 1 crore artisans working in the industry and most of them are likely to become jobless .the introduction of  excise duty will lead to excise raj in the country and harassment to the trade.

They've announced some ease of doing business measures that are positive .The need of the hour is to accelerate the economy and promote consumption.