Dimming Sheen of Unbranded Precious Metal Jewellery
PrintListen to this Article
The scheme of levy of excise duty on precious metal jewellery has been revamped. Hitherto excise duty of 1% was applicable to precious metal jewellery manufactured or sold under a brand name. The levy would now apply to both branded and unbranded goods (except silver jewellery) although at the same rate of duty of 2%. Full exemption from excise duty is being provided to silver jewellery.
Tariff Value
Duty would be chargeable on tariff value which is being prescribed under section 3 of theCentral Excise Act. Tariff value would be equal to 30% of the “transaction value” declared on the invoice and transaction value shall have the same meaning as assigned to it under section 4 of the Central Excise Act. This means that the 30% of sale bill amount will be treated as value for charging service tax.
SSI exemption:-
The benefit of SSI exemption would be available to manufacturers of precious metal jewellery and the aggregate value of clearances (both for the purpose of eligibility and exemption) would be computed on the basis of tariff value.
For Calculation of 4 Crore
The SSI exemption under notification 8/2003 is available to a manufacturer if the aggregate value of clearances for the last financial year is less than Rs. 4 crore. For the purpose of computing this value, the value exempted as well as dutiable goods will be considered. For the unit producing unbranded jewellery, who are not covered under Central Excise duty, the eligibility for year 2011-12 is to be determined. For claiming exemption for the period from 17.3.2012 to 31.3.2012, the aggregate value of clearances for the year 2010-11 is to be seen. If it is less than Rs. 4 crore then exemption for this period is available upto Rs. 1.5 crore. For calculating the limit of Rs. 1.5 crore, only dutiable goods has to be considered. As the clearances from 1.4.2011 to 17.3.2012 are exempt, hence they need to be considered. Hence, the full limit of 1.5 crore is available from 17.3.2012 to 31.3.2012.
Again for the purpose of determining eligibility of a manufacturer/ factory for SSI exemption for the year 2012-13, the computation of aggregate value of clearances of 4 Crore for the year 2011-12 is to be made. The clearances from 1.4.2012 to 16.3.2012 is to be considered. But for the clearances from 17.3.2012 to 31.3.2012, the tariff value of 30% of the transaction value and not full transaction value is to be considered.
Illustration-If a manufacturer X clears goods of value 1.4 crore till 16th March 2012, and from 17thMarch to 31st March 2012 manufacturer X clears goods of transaction value 30 lacs, the total value of clearances for SSI exemption in financial year 2011 -12 shall be calculated as follows:‑
Value of clearances from 1st April 2011 to 16th March 2012 = Rs. 1.4 crore
Value of clearances from 17th March to 31st March 2012= Rs. 9 lacs (30% of transaction value 30 lacs)
Total value of clearances financial year 2011-12 = Rs. 1 .49 crore
Job Work
The option to the job-worker to register has been deleted. Now every person who gets articles of jewellery of heading no.7113 produced or manufactured on job-work shall obtain registration, maintain accounts, pay duty leviable on such goods and comply with the procedural requirements, as if he is the manufacturer. In other words, those artisans or goldsmiths who only manufacture jewellery for others on job-work need not
obtain registration. The person supplying the goods to be manufactured has to take the registration and file returns as well as pay duty. He has to send the material to job worker under job worker procedure.
Other Changes
Full exemption from excise duty is being provided to branded silver jewellery. In respect of articles of precious metals, the levy would continue to apply only to those articles that are manufactured or sold under a brand name. Full exemption from excise duty has been provided to gold coins of purity 99.5% and above and silver coins of purity 99.9% and above when manufactured from gold or silver on which the appropriate duty of customs or excise has been paid.
Excise duty on refined gold manufactured starting from the stage of ore, concentrate or dore bars has been increased from 1.5% to 3%. The same rate has been prescribed for refined gold produced from the smelting of copper. Refined silver obtained from the smelting of copper shall henceforth attract excise duty of 4%.
Excise duty on gold jewellery sold from EOUs into DTA has been increased from 5% to 10%.
Conclusion
The exemption to manufacturing of unbranded Jewellery has been waived but the concept of tariff value (30% of transaction value) has been introduced for levy of tax on unbranded jewellery. Now the duty will be leviable on tariff value. The intention of government is to covers maximum products as possible under the levy of excise duty.
But the thing is that the prices of precious metals are sky rocking and this will add fuel to fire. This will be going out of reach of most of the persons. The time will tell whether this levy will take away the sheen of this precious metal.
Category : Excise | Comments : 0 | Hits : 377
The scheme of levy and collection of Central Excise duty on articles of Jewellery is as under: (a) The levy and collection of Central Excise Duty is on the manufacture of Jewellery (excluding silver Jewellery, not studded with diamonds, ruby, emerald or sapphire). (b) It is applicable to both branded as well as unbranded Jewellery. (c) The rate of duty on the Jewellery are as follows: (i) 1% on transaction value [without Cenvat credit on inputs and capital goods...
Clarifications on Excise imposed on Jewellery The strike by bullion traders and jewellers continued for the 8th day to protest the Budget proposal to impose one per cent excise duty(without input tax credit) on Jewellery, despite the Centre's assurance that it would look into the issue. Most Jewellery houses are closed since the finance minister Arun Jaitley in his Budget proposal on February 29 levied 1% excise duty on Jewellery. Striking associations in different part of the country h...
Dear Professional Colleague, No bar on admissibility of Cenvat credit either as Inputs or Capital goods at any stage of proceedings We are sharing with you an important judgment of the Hon’ble CESTAT, Kolkata in the case of Tata Steel Ltd. Vs. Commissioner of Central Excise, Jamshedpur [(2016) 66 taxmann.com 76 (Kolkata - CESTAT)] on following issues: Issue: Whether rails and other track materials, namely, sleepers, paints and crossings etc. used for movement of raw materials, finish...
Cenvat credit admissible on services of sales commission agent Background: Even though the definition of ‘input services’ given under Rule 2(l) of the Cenvat Credit Rules, 2004 (“the Credit Rules”) covers the services of sales promotion in its inclusive part, eligibility to avail Cenvat credit on the services rendered by a commission agent has been disputed recently because of divergent judgments and views of the Department. In this regard, the Hon’ble Punjab &...
Cenvat credit on input services availed prior to initiation of manufacturing activity is admissible Shree Cement Ltd. Vs. Commissioner of Central Excise, Jaipur [2015 (63) taxmann.com 151 (New Delhi - CESTAT)] Facts: The Department denied the Cenvat credit on the ground that Shree Cement Ltd. (“the Appellant”) is not entitled to take Cenvat credit on Service tax on cargo handling service which has been distributed to the...
Comments