For the consumer, gold and silver is going to be a tad costlier, but the industry is much more worried about the ambiguity of the term “branded jewellery” that may also cover every piece of jewellery manufactured.
The Union Budget has imposed one per cent Central excise duty on branded jewellery.
“Clearly what the finance minister says on the floor of the house is different from what the Excise Department will interpret this to be. All jewellery with a mark, be it a house mark or trade mark or brand mark will be construed as ‘branded’,” said Vinod Hayagriv, chairman All India Gems and Jewellery Trade Federation.
“The identification mark of the manufacturer or retailer in the jewellery is a sign of accountability which will help the customer go back to the retailer.
The step could lead to bringing out ‘unmarked’ jewellery and irresponsible manufacturing,” he said.
During the past few years, we have been seeing the industry getting more organised and transparent, gaining confidence of the customer and also moving up the value chain, said Rajiv Jain, chairman, Gem and Jewellery Export Promotion Council.
The industry has been looking forward introduction of presumptive tax as a move towards making the country a trading hub, but the taxation has come as a retrograde step, he said.
The government had earlier also imposed excise duty on store brands.
However, following representations by the industry it was withdrawn two years back.
According to Ajay Mitra, the raising of income tax exemption limit can also increase investment in asset classes, including gold.
“Though there are several grey areas as far as excise duty is concerned, permitting foreign retail investment in mutual funds is a positive step as this may see increased inflow of money into gold mutual funds too,” said Ajay Mitra, managing director, World Gold Council-India.