In this year’s Budget, 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.
doubts have been expressed by the trade and industry regarding this levy. In
that context, salient features of this levy are explained as under:
Easy compliance with provision for on line
application for registration, payment of excise duty and filing of returns,
with zero interface with the departmental officers.
The central excise officers have been directed
not to visit the premises of Jewellery manufacturers.
Articles of silver
jewellery [other than those studded with diamonds, ruby, emerald or sapphire]
are exempt from this duty.
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 [Rule 12AA of the Central Excise Rules, 2002].
There is a substantially high Small Scale
Industries excise duty exemption limit of Rs. 6 crore in a year [as against
normal SSI exemption limit of Rs. 1.5 crore] along with a higher eligibility
limit of Rs. 12 crore [as against normal SSI eligibility limit of Rs. 4 crore].
Thus, only 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.
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.
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.
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/].
Jeweler’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.
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.
A simplified quarterly return has also been
prescribed, for duty paying jewelers [ER-8].
Moreover, simplified export procedure is
available for exempted units [Part III of chapter 7 of CBEC’s Central Excise