2. Background
• In 2005, Central Excise Duty @ 2 % was imposed on “Branded Jeweller”.
• The collection from the same was reported merely to Rs 1.6 Crore which was representing only 1/10th of
the cost of collection of Excise duty, Hence the same was withdrawn in 2009
• In 2011, the duty was re-Introduced @1 % on “branded precious metal jewellery”.
• The same further extended to all branded and Un Branded.
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3. Excise vis-à-vis Jewellers as “Manufacture”
Under the Central Excise law, the levy of duty is on the taxable event of “manufacture” of Excisable goods.
However the collection of duty is made at the point of removal of the manufactured goods from the place of removal
Below questions, will help Jewellers to understand whether they need to obtain Excise registration or not
(a) There should be manufacture
(b) Manufacture should be of “Goods”
(c) Such goods manufactured should be Excisable goods
(d) Manufacture should happen to India
In addition to this there is a concept of “deemed manufacture” wherein certain processes are deemed to be
“manufacture” though it is not considered as manufacture in the common understanding as explained above.
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4. Other principle and Activities to be performed by “Jewellers”
1. The liability to pay Central Excise duty is on the person who manufactures the goods irrespective of the fact whether
he is the owner of the goods or not
2. In the Jewellery sector, in case of job work, there is an exception to the above rule the person who gets the article of
Jewellery produced or manufactured on his behalf on job work basis will be liable to pay duty.
• Such person who is so getting the goods manufactured on job work basis is also required to obtain registration;
maintain required records
3. A person liable to pay duty shall be required to
Obtain Registration
Raise invoice for removal of goods
Maintain records as to Inputs and Finished good
(Opening /Receipt(Manufactuer)/Removal/Duty/Stock)
Quantify the duty payable on periodical basis
Avail CENVAT credit on inputs
File Periodical returns
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5. Taxability of Jewellery industry Post Budget 2016-2017
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)
It is applicable to both Branded and Un branded jewellery.
The rate of duty on Jewellery are as follows:
(a) 1 % on Transaction value without Cenvat Credit on inputs and capital goods
Or
`(b) 12.5 % with Cenvat Credit of Inputs , Inputs Services and Capital goods
Benefits of SSI exemption is available if value of manufactured goods (On own or through Job Work )
cleared domestically has not crossed Rs 12 Crore (all goods manufactured including silver jewellery) in the
Financial year 2014-2015 . The benefit for March 2016 is 50 Lacs.
And If 12 Crore limit is not crossed in Financial year 2015-2016 , then exemption upto 6 Crore can be
availed for the Financial year 2015-2016.
Eligibility Criteria for SSI exemption shall be certified by Chartered accountant and no verification from Departmental office would
be conducted . Also for determine the SSI value , Value of goods exporter or manufactured with other brand name shall be excluded
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6. What all goods are covered therein in the definition of “Excisable Goods”
Following goods are covered in the Chapter 71 of the Central Excise Tariff Act:
• Natural or Cultured Pearls
• Precious or Semi-precious stones
• Precious Metals
• Metal Clad with precious metal and articles thereof
• Jewellery including imitation jewellery
• Coin
Tariff item Description of goods Unit Tariff Rate of Duty
7113
Articles of Jewellery , of precious metal or metal Clad
with precious metal
7113 11
of Silver , whether or not plated or clad with other
precious metal :
7113 11 10 Jewellery with Filigree work Kg 12.50%
7113 11 20 Jewellery studded with Gems Kg 12.50%
7113 11 30 Other Articles of Jewellery Kg 12.50%
7113 11 90 Parts Kg 12.50%
7113 19
of Other precious material, whether or not platetdor
clad with precious metal :
7113 19 10 of Gold, unstudded Kg 12.50%
7113 19 20 of Gold , set with pearls Kg 12.50%
7113 19 30 of Gold , set with diamonds Kg 12.50%
7113 19 40 of Gold , set with other precious and Semi-precious stones Kg 12.50%
7113 19 50 of platinum m unstudded Kg 12.50%
7113 19 60 Parts Kg 12.50%
7113 19 90 Other Kg 12.50%
7113 20 00 of base metal clad with precious metal Kg 12.50%
Other Clarification
Placing of “House mark” does not amount
to Manufacture
Placing of Trademark/Brand name need to
be collectively seen
In case of job work , Liability to be
discharged by the manufacture
Change in purity would not amount to
Manufactuer
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7. Other Clarification
1. Excise duty shall not be applicable to branded and unbranded silver jewellery. However if the same is studded with
Ruby , emerald or sapphire the same shall be subject to Excise duty
2. Silver jewellery plated with gold jewellery is not subject to Excise duty.
3. Excise duty is applicable in case of “Platinum Jewellery”.
4. Trading of Jewellery is not subject to Excise Duty.
5. Settlement of Consideration in Gold shall not amount to “Manufacture”.
6. Affixing of Brand name and the selling the same in market place fall under the definition of “Manufacture”.
7. Goods Manufactured post 1st March 2016 shall fall under “Excisable goods” definition
8. Manufacture via Job wok basis and sold through Job work location shall amount to manufacture and should not
considered as Trading
9. Exports Sale and Sale to NRI is outside the Purview of Excise Duty
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8. Valuations/Due date /Returns
1. Excise duty need to be paid on the removal of Goods from the “place of Manufacture”
2. Excise duty has to be paid on the “Transaction Value” ie Value at the place of Sale (Showroom, Job work place)
3. Valuation shall be the transaction value with the customer , which includes all charges and all additional consideration
received if any.
4. In case of instalment , Valuation shall be done on the total monthly instalments amounts
5. Repair /recondionting shall be subject to Excise duty
6. In case where End user (Indiviuals etc.) gives old gold for manufacture of jewellery to get Refurbished /revised gold ,
then the it shall amount to manufacture and in that case End user can avail SSI exemption
7. Branded Coins are subject to Excise Duty
Due Date of the Payment
1. On or before 6th of Succeeding month, In case of March , 31st March
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9. Thanking you
For more details
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