"There is no reason why a luxury item like gold should be kept out of the ambit of a manufacturing tax like excise duty. Since the manufacturing tax is levied on essential commodities like steel, cement, jute, cotton and others, why not on gold."The country is to move towards Goods and Services Tax (GST). Gold will also follow towards GST. Most states levy value added tax on gold," he said.

He also noted that if gold is kept out of GST ambit, tax rate on rest of the goods will have to be increased.

The government, in the Budget for 2016-17, had proposed one percent excise duty on jewellery without input credit or 12.5 percent with input tax credit on jewellery excluding silver other than those studded with diamonds and precious stones.

Jewellers went on strike opposing one percent excise duty on gold jewellery. The strike enters 40th day yesterday.

The central government subsequently clarified even for one percent excise duty, manufacturers were allowed to take credit of input services, which could be utilised for payment of duty on jewellery.

Also, there is no requirement to file a stock declaration to the jurisdictional central excise authorities, it added.

Latest News  from Business News Desk