March 26, 2012 , Zeebiz Bureau,
New Delhi: In what could be a big embarrassment to the UPA government, senior Congress leader and Coal Minister Sriprakash Jaiswal has slammed that the excise duty hike announced by Finance Minister Pranab Mukherjee on jewellery in this year’s Union Budget.
Reports, Monday, claimed that Jaiswal made these remarks while attending a meeting in Kanpur where he expressed solidarity with the jewelers opposing the excise duty hike.
Reacting to the move, the Coal Minister even compared some government departments to mosquitoes that suck their blood.
"For only Rs 100 crore of revenue I realise how much you will have to go through. Like mosquitoes in the night, in our country there are some departments that also suck blood," he was quoted as saying.
However he later denied making any obvious reference to the Finance Ministry. Clarifying his stand over the issue Jaiswal said, "I still stand by what I said. I have said nothing against Finance Ministry. I was only referring to the mismanagement and the wrong doings in several government departments".
He made this remarks following a meeting with Finance Minister Pranab Mukherjee.
Bullion and jewellery markets have strongly opposed the imposition of excise duty on unbranded jewellery and doubling of import duty on gold. Many jewellery shops have remained closed in various cities in protest.
Importantly, the All India Sarafa Association has also approached the Congress president and UPA chairperson Sonia Gandhi seeking her intervention in the matter.
Traders are protesting against the budget proposal imposing excise duty of 1% on unbranded precious jewellery and doubling of customs duty on standard gold bars and coins to 4%.
In a week after the Union Budget was tabled, sources claimed that the bullion and jewellery industry incurred a loss of over Rs 10,000 crore, including Rs 750 crore on the auspicious day of 'Gudi Padwa" in Mumbai alone.
Retail jewellers brought under the excise net by the recent budget proposal were more worried and requested shifting of duty to another form.
Traders have warned that imposition of higher levies may lead to a rise in retail gold prices by over 6% in the country, which is seeking to rein in a widening current account-deficit partly fuelled by record purchases in 2011.
All India Bullion and Jewellers' Association said the proposed excise duty on jewellery would affect the business and needs elaborate book-keeping which could be a cumbersome process for jewellers.