CA Lalit Munoyat
To be candid enough, there is nothing much to write in the second part of Excise duty on unbranded items of jewellery of precious metal except some CLARIFICATIONS:
1) There is No Excise Duty on jewellers who are engaged only in trading activity i.e. only buying & selling so long as they do not engage in the manufacture of the same. This being so they are not required to obtain any excise registration and/or keep separate documents and file any excise returns. No field excise officer can ever raise any demand for excise duty from jewellers who are traders only.
2) There is No Excise Duty liability on any Job Worker (Karigar) who is engaged in the manufacture of items of jewellery only on behalf of his Principal jeweller. Last year, the Job worker had the option to discharge the excise duty liability of his Principal jeweller. This year this option has been removed such that even if a Job worker wishes to exercise such option, the same is simply not available to him. This means even if a Job Worker wishes to obtain registration to pay duty on behalf of his Principal manufacturer, he is not allowed to do so. It is only the Principal manufacturer who shall be liable to duty. Job workers are totally out of the excise duty laws.
3) I have made some calculations so as to clarify the duty liability. The same are attached hereto. A summary of these calculations are as under:
a. Manufacturers of jewellery bearing brand name of third party does not enjoy SSI exemption and their duty liability starts from the first bill itself.
b. In the case of manufacturers of jewellery bearing own brand name, the quantum of duty liability is dependent upon the time till he reached the turnover of Rs. 150 Lakhs during 2011-12. There are 3 Tables dealing with such situations:
i. Turnover of Rs. 150 Lakhs having been achieved before 17-03-12
ii. Turnover of Rs. 150 Lakhs being reached after 16-03-12 but before, say for example only , 23-03-12
iii. Turnover of Rs. 150 Lakhs being reached after 22-03-12 but before, say for example only, 31-03-12
(The split dates have been assumed only for explanation and has no relevance except for the example)
c. In the case of manufacturers of Unbranded jewellery, the quantum of duty liability is again dependent upon the time till he reached the turnover of Rs. 150 Lakhs during 2011-12. There are similar 3 Tables dealing with such situations:
d. While evaluating the duty liability/SSI exemption for the year 2012-13, the turnover has been calculated on tariff basis i.e. taking 30% of the invoice value of the turnover of the year 2011-12. If such turnover exceeded Rs. 4 Crores, then SSI exemption is not available for the year 2012-13
PART- II B
4) ASSURANCE FROM THE FINANCE MINISTER
a. On 18th March 2012 the Finance Minister told bullion dealers, who have gone on strike against the levies on gold, that their pressure tactics “will simply not not work”. Not only this he further told PTI in an interview “I did it deliberately,” One hope his statement was against the three-day strike by bullion dealers only and not against the small manufacturers there could still be some breathing gap for manufacturers of unbranded items of jewellery.
b. However on 29-03-2012 the FM showed reconcillation when he promised for relief to the jewellery sector.
The FM reiterated his promise to reconsider his Budget proposal to tax unbranded jewellery, but remained firm on the import duty on gold. In his reply to the debate on Budget in the Rajya Sabha, Mukherjee said he would make appropriate announcements in respect of unbranded jewellery in the second half of the budget session of Parliament.
“You will have to wait till (debate on) the Finance Bill …we are examining… but please don’t insist on reduction of import duty (on gold). Import duty reduction is not possible,” he said.
Finance minister also promised to reconsider the decision to make PAN declaration mandatory for purchase of gold jewellery of over 2 lakh.
He assured jewelers that there would no scrutiny if they provided provide a self-declaration that their turnover is less than Rs 5 crore. “Self declaration will be final…no scrutiny,” he said.
He ruled out any rethink on his decision to double the customs duty on gold and platinum to 4% saying the country could not afford to spend foreign exchange on such items.
Under the backdrop of the above promises one hope that smile will return on the faces of the small jewellery manufacturers when the parliament resume debate on the union budget from 22-04-2012.
Related Articles Written by the Author:-
CA Lalit Munoyat
B.Com.(Hons.), CS., FCA, DISA
S. No. Link 1 Guide to Excise Duty Levy on Jewellery under Budget 2016 2 Clarifications on Excise Duty imposed on jewellery 3 Budget 2016: Excise Duty Applicability on articles of Jewellery 4 Excise Duty on Jewellery articles: No visit at jeweller’s premises 5 ‘Excise Duty Studded on Jewellery by Budget, 2016 6 105 FAQs on Excise Duty on Jewellery 7 Excise duty on jewellery– No arrest,prosecution, search or seizure 8 BRIEF ON Excise duty on items of jewellery levied by Budget 2016 9 Govt forms Committee on issues related to excise duty on jewellery 10 Central Excise on Jewellery : Whether fears are real? 11 Excise on Jewellery – A Brief Overview 12 Procedure for Centralized Excise Registration for jewellery article manufacturers 13. Valuation of jewellery under excise: Practical scenarios 14 Registration under excise by jeweler: A Thoughtful Decision