The Union Budget 2016-17 may not have directly alluded to the pending goods and services tax, as it has brought a large number of sectors that are availing themselves of exemptions into the tax net.

“If we are talking of GST, we are now talking of all these sectors – small-scale industries, edible oil, textile sectors, area based exemptions, moving towards the tax net. How else are we going to have GST?” said Najib Shah, Chairman, Central Board of Excise and Customs, at an Assocham event on Thursday.

Though manufacturing contributes 17 per cent to the GDP, he noted that a large chunk of industry is still out of the tax net. He also urged industry to stop seeking exemptions. “If you want GST, you should not demand exemptions because the two don’t go together,” he said.

Duty on gold

Meanwhile, explaining the Budget proposal to re-impose a one per cent excise duty on gold and diamond jewellery, he said that the sector was brought under the tax net as it generates a lot of black money.

“This is the levy which we had attempted two years ago and withdrawn…this is a sector which lends itself to generation of unaccounted wealth,” he said.

Finance Minister Arun Jaitley had in the Budget proposed one per cent excise duty on jewellery without input credit or 12.5 per cent with input tax credit on jewellery excluding silver other than studded with diamonds and some other precious stones.

However, arguing that this will impact the sector, jewellers including manufacturers, wholesalers and retailers are on a three-day strike from March 2.

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