Jewellers urged to register with central excise dept, pay duty

In the wake of repeated protests by gold jewellers in the city, the central excise department on Tuesday urged the jewellers to accept the Centre’s new rule to impose 1% excise duty on jewellery.

The department has told the jewellers to register with them on or before March 31 in order to pay the excise duty.

On February 29, the Union Minister for finance, Arun Jaitley in the union budget had proposed that 1% excise duty (without input tax credit) or 12.5% (with input tax credit) will be imposed on jewellery. The commissioner of central excise, V Rajendran in a press meet on Tuesday afternoon told that there have been some doubts over this new rule, and the department would like to clarify it to the jewellers.

He said that articles of silver other than those studded with ruby, diamond, emerald or sapphire are exempted from the rule. “Artisans and goldsmiths are also exempted from the rule. The limit for small scale industries has also been raised from 6 to 12 crores,” he said. “So, small scale industries will be exempted of excise duty for turnover until 6 crore, which is, 50 lakh per month,” he added. Excise duty will have to be paid on a monthly basis, the commissioner further said.

 The department officials said a certificate by a chartered accountant based on books of accounts for 2014-2015 and 2015-16 would suffice for jewellers to identify their excise duty exemption for March 2016 or the financial year 2015-16.
When TOI asked about the number of jewellers in the city who would fall under the ambit of the new rule, Rajendran said, “There are around 400 estimated jewellers under this. However, proper figures will be ascertained only when the jewellers register with us.” Some have approached the department to understand the registration procedure.

A total of 271.12 crore was collected in 2015-16 (up to February 2016) for 11.78 metric tonnes of gold.

Govt. clarifies on excise duty on articles of jewellery

The Government has, in response to concerns expressed by the jewellery industry about the nominalexcise duty of 1% [without input tax credit] and 12.5% [with input tax credit] imposed on articles of jewellery in the Budget for 2016-17, clarified that, in case of jewellery manufactured on job work basis, the liability to take registration, pay duty and to file return is on the principal manufacturer and not on the job worker.

Further, exemption from excise duty up to the clearance limit of Rs. 6 crore is available to a jewellery manufacturer if his aggregate value of domestic clearances is less than Rs. 12 crore in the preceding financial year, an official press release said.
The release said artisans and job-workers were not covered within the ambit of this duty and thus they were not required to take registration, pay duty, file returns and maintain any books of account.
A jewellery manufacturer having turnover less than Rs. 12 crore during the preceding financial year and less than Rs. 6 crore in the current financial year is not required to take registration and file return, it said.
The release said application for excise registration as well as returns can be filled online here. [https://www.aces.gov.in/].
It said directions had been issued to the field formations to provide hassle free registration within two working days. There will be no post registration physical verification of the jeweller’s premises.
“There is no requirement of declaring pre-budget stocks. Directions have also been issued barring any visits to the jeweller’s premises.
“Jeweller’s private records or his records for State VAT or for Bureau of Indian Standards (in the case of hallmarked jewellery) would be accepted for all Central Excise purposes,” it said.
The clarifications came after representatives of the industry met the Secretary (Revenue), Government of India and Chairman, Central Board of Excise &Customs here on March 17 to discuss the concerns regarding imposition of this levy.
The representatives said at the meeting that the reimposition of the levy would bring back the regime of the erstwhile Gold control Act, leading to harassment of jewellers, especially artisans and small goldsmiths.
They said this would also result in visits of inspectors to the jewellers, thereby bringing back the days of “Inspector Raj”.
They also had queries about wo had to take exciseregistration and file returns and which documents needed to be maintained for excise purposes.
The representatives of the industry also requested for increase in exemption limit of Rs. 6 crore in a year to Rs.10 crore, and urged for an early consideration of the same.
Regarding concerns relating to procedures and compliance to the levy, the representatives of industry were informed that all these issues had already been clarified to field formations and also through a press release on March 4.
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