Jewellers have started getting tax notices over the one per cent excise duty imposed by the Budget for 2016-17, even as they called off their 18-day strike on the issue from Saturday evening, after assurances from Finance Minister Arun Jaitley against harassment. The notices ask jewellers to furnish details of turnover, copies of balance sheets and income tax returns.

"It is ironic that as the minister assured us against harassment by tax officials, many of us have already started receiving notices. There is a huge disconnect between the policy makers and the tax officials. We do not want inspector raj to return to the sector," said a jeweller, who did not wish to be named.

According to the notices, reviewed by Business Standard, jewellers have been asked to provide their turnover for the past two years in some cases and expected turnover for March 2016. They have also been asked for a copy of income tax, value added tax and sales tax returns for 2014-15 and 2015-16.

"As it relates to inquiry with regard to safeguarding the government revenue, your cooperation is required," said one of the notices.

The government re-introduced (it had also done so in 2012 but withdrew it after jewellers went on strike) a one per cent excise duty on jewellery in the latest Budget, on course to a national goods and services tax (GST) regime. Government calculations show the levy will only generate revenue of about Rs 1,000 crore, clearly suggesting this isn't the main aim.

The government has also decided to form a committee to address jewellers' concerns on implementation of the duty. The report is to be given within 60 days. The All-India Gems and Jewellery Trade Federation, India Bullion and Jewellers Association and Gems and Jewellery Export Promotion Council decided to call off the strike after meeting the minister.

The Central Board of Excise and Customs said it had issued instructions that no stocks declaration will be required to be made to the excise authorities by jewellery makers.

And, that officials have been told not to visit premises of these assessees for routine purposes like stock or record verification.

"We have started receiving notices, despite repeated assurances. There must be action against officials who do not comply with the instructions," said a jeweller.

Trade representatives met Revenue Secretary Hasmukh Adhia last week, raising concerns that reimposition of the levy will bring back the Gold Control Act regime, resulting in harassment of jewellers, especially artisans and small goldsmiths.

The government assured jewellers that directions had been issued to the field formations to provide hassle-free registration within two working days. Beside, there will be no post-registration physical verification of premises.

There is no requirement of declaring pre-Budget stocks, Adhia told them last week.

A committee headed by chief economic adviser Arvind Subramanian has proposed taxing of gold and precious metals at two to six per cent under GST, as against the standard rate of 17-18 per cent.

As against an excise exemption limit of Rs 1.5 crore a year for normal small scale industry (SSI), the jewellery sector has an exemption limit of Rs 6 crore.

Beside, the eligibility limit has been fixed at Rs 12 crore turnover per annum as against Rs 4 crore for normal SSI units.

Jewellers with a turnover below Rs 12 crore in the preceding financial year will be eligible for exemption up to Rs 6 crore during the next one.