"The central government declared in the budget to hike 1 percent excise duty on jewellers. The Delhi government strongly objects to it and I request you (Modi) to roll back the duty immediately," Kejriwal wrote in a letter to the prime minister.
His demand came after a delegation of jewellers met him and sought his support for the rollback.
The Aam Aadmi Party leader said jewellers did not have to pay any excise duty so far, and this was the first time when excise duty has been imposed on them.
"Now excise inspectors would create problems for jewellers. The government would not get any revenue by hiking 1 percent excise duty. All the money would be sacrificed on the altar of corruption.
"This would increase problems for jewellers. In spite of doing their work, the jewellers would be busy making new account registers for the excise department and the government will have to spend more money compared to the money collected from the hiked excise duty," he wrote in the letter in Hindi.
Kejriwal said jewellers across the country were unhappy over the government decision. He said most of these jewellers voted for Modi and now felt cheated.
"Jewellers are very peaceful and law abiding people but all of them have been protesting the government decision. The UPA government had also tried to hike excise duty in 2012. At that time, you (Modi) were the chief minister of Gujarat.
"After a 22-day strike, the then finance minister Pranab Mukherjee had to roll back the excise duty hike. Now people are surprised that you (who) had opposed excise duty hike at that time (now) did the same thing," Kejriwal said.
"Following this issue, people have also started feeling that you are applying all those policies which you had opposed when you were in opposition," Kejriwal said.