NEW DELHI: After steel and metals, the government has moved to protect the local gold jewellery-making industry from imports that threaten the jobs in the sector.
Gold jewellery imports from the 10-member Association of South East Asian Nations (ASEAN) under the free-trade agreement, which have been under the scanner for some time, will face a 12.5% countervailing duty in lieu of 12.5% excise duty imposed in the budget. The duty will make imports more expensive and protect the local industry.
“Excise duty without credit is pegged at 1%, but CVD would be equivalent of 12.5%, the rate proposed with credit,” said a government official.
The import of jewellery, especially under the India-ASEAN free-trade agreement after basic customs duty on gold was increased to 10%, has emerged as a big issue. The move to raise customs duty was aimed at discouraging the import of the yellow metal, which had contributed to a widening of India’s current account deficit. However, inbound shipments under FTAs with Thailand and ASEAN increased because of lower rates of 1% and 2%, respectively.
As of now, customs insist on a bond of duty differential from these countries, which requires appropriate higher duty to be paid if there is any violation.
Imposition of duty would also ensure incentive for production in the country and the Make in India initiative. Replying to a debate in the Lok Sabha on the general budget, Jaitley rejected the demand for rolling back the levy, saying the move is in preparation for implementation of the goods and services tax.
The government has sought to allay the industry’s apprehensions by promising an inspector raj-free regime without any hassle of fresh documentation. Excise authorities will accept value-added tax documents submitted to the state authorities.
