CLARIFICATIONS ON LEVY OF EXCISE DUTY IMPOSED ON JEWELLERY

JEWELLERY WAS NOT LIABLE FOR EXCISE DUTY TILL FEBRUARY 29, 2016. In #UnionBudget2016, a nominal excise duty of 1% [without input tax credit] and 12.5% [with input tax credit] has been imposed on articles of jewellery. Even for this nominal 1% excise duty, manufacturers are allowed to take credit of input services, which can be utilised for payment of duty on jewellery w.e.f 01st March, 2016.

However some doubts have been expressed by the trade and industry regarding this levy for which some clarifications has been provided by the CBEC, which are as Follows:

  1. Easy Compliance which includes on line application for registration, payment of excise duty and filing of returns and zero interface with departmental officers.
  1. The central excise officers have been directed not to visit the premises of Jewellery manufacturers.
  1. Articles of silver jewellery [other than those studded with diamonds, ruby, emerald or sapphire] are exempt from this duty.
  1. An artisan or goldsmith who only manufactures jewellery on job-work basis is not required to register with the Central Excise, pay duty and file returns, as all these obligations will be on the principal manufacturers.
  1. However, if the turnover of a jeweler during preceding financial year was more than Rs. 12 crore, he will be liable to pay the excise duty. Jewelers having turnover below Rs. 12 crore during preceding financial year will be eligible for exemption unto Rs. 6 crore during next financial year. Such small jewelers will be eligible for exemptions upto Rs.50 lakh for the month of March, 2016. 
  1. For determination of eligibility for the SSI exemption for the month of March, 2016 or financial year 2016-17, a certificate from a Chartered Accountant, based on the books of accounts for 2014-15 and 2015-16 respectively, would suffice.
  1. Further, facility of Optional Centralized Registration has also been provided. Thus, there is no need for a jewellery manufacturer to take separate registrations for all his premises.
  1. Field formations have been directed to grant hassle free registrations, within two working days of submission of the registration application. Further, there will be no post registration physical verification of the premises [online registration – https://www.aces.gov.in/].
  1. Jeweller’s private records or records for State VAT or records for Bureau of Indian Standards (in the case of hallmarked jewellery) will be accepted for all Central Excise purposes. Also, there is no requirement to file a stock declaration to the jurisdictional central excise authorities.
  1. Excise duty is to be paid on monthly basis and not on each clearance, with first installment of duty payment for the month of March, 2016 to be paid by 31st March for March, 2016.
  1. A simplified quarterly return has also been prescribed, for duty paying jewellers [ER-8].

 

Please feel free to drop an email to us at [email protected] / [email protected] for any further queries on the above blog.

Chartered Accountant in Ghatkopar, Mumbai

About Chartered Accountant in Ghatkopar, Mumbai

A.P. Doshi & Co Chartered Accountants is practicing into Accounts outsourcing, Audit & Assurance, Direct & Indirect Taxation and Management Consultancy services since 1985. We cater to a Family owned, PE / VC Backed businesses, listed companies, Multinationals, NGOs, etc. across the globe. We have a stated policy of following holistic approach, giving complete visibility and best in class turnaround time to each client. This is achieved by bringing the technical and analytical skills to an assignment, which is developed, through the academic background, adoption to latest technology, continuing professional education and engagement experience of our team.

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