Buying jewellery in black money is least risky.Once central excise duty is imposed it would be difficult to hide manufacturing activity & subsequent sales.


If for one measure, Modi’s Budget 2016 can really be appreciated, it is the imposition of central excise duty at the rate of one per cent ad valorem on gold jewellery. It is the first time levy.  Apart from yielding substantial revenue, it will go a long way towards curbing the menace of black money in the  country. However, a question mark hovers over its very survival. Why?  Is it really burdensome? Why does it look so menacing? Why are the jewelers opposed to it?
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Let me first explain how light is the duty imposed on gold jewellery as compared to that on other excisable goods. At present the market value of gold hovers  around Rs. 29,000/- per ten grams.  Hence, gold jewellery weighing ten grams will have to discharge central excise duty of Rs. 290/- only. If a buyer can afford to spend Rs.29,000/- on jewellery, he may as well pay Rs. 290/- towards central excise duty. Mind it, the central excise duty is an indirect tax payable by the manufacturers. How many jewellery show room owners are manufacturers? Only a few in India on paper. Surprised? Take a look at the balance sheets of renowned jewelers in India. Their gross profit is invariably twenty per cent.!!!!!!!!!!!!!!
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The government may have been faulted on the ground that the levy will hit the small manufacturers and artisans i.e. goldsmiths involved in making jewellery. This problem has already been taken care of. Manufacturers including artisans and goldsmiths making jewellery valued up to rupees six crores in a  financial year have been fully exempted from the levy. Thus, those really effected by the levy are big jewellery manufacturers. A levy of one per cent ad valorem  on jewellery, therefore, appears laughable !! Then why this hue and cry?
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Jewellery protest Budget Analysis For Jewelers Turned Out Unfortunate

India is the world’s second largest importer of gold after China. According to the All India Gems & Jewellery Federation, the country imported around 900 tonnes of gold in 2014. “Gold import is estimated at around 1000 tonnes in calendar year 2015, compared to around 900 tonnes last year” All India Gems & Jewllery Trade Federation Chairman G V Shreedhar said. He also said imports through smuggling are estimated to be around 100 tonnes in 2015.

It is estimated that we imported gold worth more than Rs. 18 lakh crores in the past ten years.To this  quantity may be added the old jewellery remelted for making new jewellery and of course the  smuggled gold, silver and rough and finished diamonds.  Thus, on a conservative estimate, it may be safely assumed that the manufacturing activity in this sector amounts to three lakh crores per year!!!! Is it not sensible to tax such a mind boggling vast manufacturing activity? Why was this sector a holy cow so far? The reason is not far to seek.


In our country real estate, jewellery and bullion and exports provide a tremendous scope for money laundering. Buying jewellery and bullion in black money is the easiest and the least risky. Once central excise duty is imposed it would be difficult to hide manufacturing activity and subsequent sales. Thus, a safe haven for converting black money into white will be lost for ever. I, therefore, request the public and right-minded leaders to support the levy of central excise duty on jewellery and pressurize the government against its withdrawal.REFERENCES:

(1) Union Budget 2016 – 17
(2) Daily Market Price of gold in local papers
(3) for statement by chairman of AIGJTF
(4) PTI report dated Dec.22,2015
(5) World Gold Council report for 2015.
(6) All India Gems & Jewllery Trade Federation
(7) Justification of levy by the incumbent Revenue Secretary, Ministry of Finance, Government of India, N. Delhi.
(8) Market survey of jewellery market in UP.
(9) Balance Sheets of big jewellers as available on internet



Notwithstanding  the  fact that the ruling party in a democracy is prone to indulging in populist measures to remain in power, it would be disastrous to abandon long term goals in face of political expediency, particularly when the very survival of the human race is at stake. Unfortunately, the Finance Minister in his  budget speech did not find it worthwhile to even mention this global crisis, let alone find the ways how to tackle it. Was it an ominous silence? Was the PMO  clueless about the budget  proposals? Is the government not serious about its  international obligations and commitments? 


It might be called preposterous on my part to remind the honorable Prime Minister that only in  November  2015 he visited a beautiful place called Paris to attend the World Climate Change Conference ( also called COP 21), where  leaders of  the world had gathered to find ways and means to tackle the menace of global warming.  The 195 Parties to the UN Framework Convention on Climate Change (UNFCCC)  adopted the Paris Agreement after two weeks of intensive negotiations at the summit.

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Calling the Paris Agreement on climate change “a health insurance policy for the planet,” United Nations Secretary-General Ban Ki-moon said he never lost faith over his nine years in office that the international community could rise to the challenge and take steps to curb emission and boost climate-resilient growth. “It is a health insurance policy for the planet. It is the most significant action in years to uphold our Charter mandate to ‘save succeeding generations.’ For the first time, every country in the world has pledged to curb emissions, strengthen resilience and act internationally and domestically to address climate change.”


The Environment Ministry has got Rs 2,250.34 crore in the 2016-17 Union budget  of which Rs 2,000 cr is under plan head and Rs 250.34 cr under non plan. Last year, the Ministry had got Rs 1668.60 crore of which Rs 1,446.60 crore was under plan and Rs 222 crore under non plan heads.The 2016-17 budgetary allocation marks an increase of Rs 581.74 crore over the current fiscal.

Finance Minister  increased the cess on coal production from Rs 200 per tonne to Rs 400 per tonne. He also said the Clean Energy cess would be renamed as Clean Environment Cess. When it was doubled from Rs 100 per tonne to Rs 200 per tonne last year, it was estimated that it would contribute about Rs 13,000 crore to National Clean Energy Fund (NCEF) every year. With the value of this fund going up further with the latest hike, the entire budget allocation for Ministry of New and Renewable Energy for this year — Rs 5,000 crore — is proposed to come from NCEF. Half the plan outlay for Environment Ministry, about Rs 1,000 crore, is also proposed to be met through this fund.

Terming pollution and traffic situation in Indian cities as a “matter of concern”, FM also proposed to levy an infrastructure cess of 1 per cent on small petrol, LPG, CNG cars, 2.5 per cent on diesel cars of certain capacity and 4 per cent on other higher engine capacity vehicles and SUVs.


Any number of reports from the renowned organizations/institution/NGO’s  around the world may be cited to support the view that the global climate change is for real and that human activities are primarily responsible for it. However, I would like referring  to  the  Synthesis Report released by the Intergovernmental Panel on Climate Change (IPCC) . The Synthesis Report distills and integrates the findings of the IPCC Fifth Assessment Report produced by over 800 scientists and released over the past 13 months – the most comprehensive assessment of climate change ever undertaken.

The Synthesis Report confirms that climate change is being registered around the world and warming of the climate system is unequivocal. Since the 1950s many of the observed changes are unprecedented over decades to millennia. “Our assessment finds that the atmosphere and oceans have warmed, the amount of snow and ice has diminished, sea level has risen and the concentration of carbon dioxide has increased to a level unprecedented in at least the last 800,000 years,” said Thomas Stocker, Co-Chair of IPCC Working Group I.

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The report expresses with greater certainty than in previous assessments the fact that emissions of greenhouse gases and other anthropogenic drivers have been the dominant cause of observed warming since the mid-20th century. The impacts of climate change have already been felt in recent decades on all continents and across the oceans.

“We have the means to limit climate change,” said the Chair of the IPCC. “The solutions are many and allow for continued economic and human development. All we need is the will to change, which we trust will be motivated by knowledge and an understanding of the science of climate change.”

Is the Prime Minister of India listening? If not, we are waiting for a disaster. Forget the so-called Vikas, even our survival is in danger. This is not five star activism. Mind it, this is the stark reality. The choice is yours.

By Vimlesh Kumar

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