Gold and other jewellery will be part of the Goods and Services Tax (GST) regime which will subsume the 1 percent proposed excise levy, as there cannot be a situation where essential items are taxed and luxury items like gold are left out, he said in an interaction with journalists.

"A luxury item must pay its share of taxes. So on procedural harassment, if they have any suggestions, I am willing to accept for simplification so that there is no harrasment... I am willing to take an extra step. But indefinitely India can not have a situation where luxury items go untaxed," Jaitley said.

Government's decision to levy 1 percent excise duty on jewellery had created sharp reactions from jewellers who have been on strike for 26 days. The jewellery industry have been demanding roll back of excise duty hike.

The government has set up a committee under former chief economic advisor Ashok Lahiri to look into the problems of jewellers and suggest ways to eliminate harassment.

The Minister further said that committee on GST headed by CEA Arvind Subramanian was against exempting gold arguing that "if you keep gold out... tax on other products have to go up. Other products cannot subsidise gold".

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