'Govt will not withdraw excise duty on jewellery'

Finance Minister Arun Jaitley on Thursday ruled out withdrawal of 1% excise duty on non-silver jewellery, a demand that saw shutters of jewellery shops down across the country for weeks together.

Jaitley also warned of strict action against income from other sources being passed off as agriculture income, in order to escape taxes, but ruled out any tax from agriculture earnings.

“It is not the Centre’s intention and neither is its intent. The Centre has no power to tax agriculture. It is a state subject. We will even advise states that they should not levy this tax,” he said in his reply to the finance bill in the Lok Sabha.

During the debate on finance bill, Bhartruhari Mahtab of the Biju Janata Dal and Saugata Roy of the All India Trinamool Congress demanded tax on rich farmers and firms which claim exemption on agricultural income despite earning crores in profits.

Jaitley said that there were some instances where income earned through other sources were being passed off as agricultural income. The income tax officials were aware of this and were taking action.

“But the current state of Indian agriculture does not warrant any such tax,” Jaitley said. The bill was later passed by a voice vote with some amendments.

On the government’s decision to stick to 1% tax on non-silver jewellery, Jaitley said it would be levied on jewellers with turnover of Rs 12 crore and more. Opposition Congress and NDA ally ShivSena had demanded a rollback of excise duty on jewellery.

“I am unable to understand this politics, this economics where you hate suits but are in love with gold,” he said, taking a jibe at Congress.

The Finance Minister also expressed concern over rising levels of non-performing assets of the banks hindering the economic growth. He said income tax notices have been sent to all names revealed in Panama paper leak case.