Finance Minister Pranab Mukherjee to review gold tax proposal

NEW DELHI: Parliament today approved the first part of the Budget with Finance Minister Pranab Mukherjee promising to look into demands for roll back of his proposal to tax unbranded jewellery but ruled out withdrawal of hike in import duty on gold.

Replying to debate on Budget in the Rajya Sabha, he said that he would make appropriate announcements with regard to the tax proposal on unbranded jewellery in the second half of the session.

"You will have to wait till (debate on) the Finance Bill ...we are examining...but please don't insist on reduction of import duty (on gold). Import duty reduction is not possible," he said.

Mukherjee said he would also re-consider the proposal to make quoting of PAN mandatory for purchase of gold jewellery of over Rs 2 lakh.

His budget proposal to tax unbranded jewellery had evoked sharp reaction with bullion traders going on strike in several parts of the country.

With the Rajya Sabha returning the relevant bills, Parliament today completed the first phase of the budgetary exercise for 2012-13.

Mukherjee clarified that there would no scrutiny if the jewellery traders provide a self-declaration that their turnover is less than Rs 5 crore. "Self declaration will be final...no scrutiny," he said.

On his decision to double custom duty on gold and platinum to 4 per cent, he said, it was not possible to withdraw the hike as the country cannot afford to lose foreign exchange on such imports.

India, he said, produces only 2 tonnes of gold, while its gold import bill worked out to be USD 46 billion in April- November 2011, next only to USD 71-72 billion of crude oil.