Highlights of Applicability of Excise on gems and jewelry industry
This write up is to replace you on the latest trends on applicability of Excise on gems and jewelry enterprise. On the idea of round No. 1040 /28 /2016-CX to No. 1045 /33 /2016-CX ; and Notification No.’s 26/2016-primary Excise to 29/2016-valuable Excise; No.’s 33/2016-important Excise (N.T.) to 40 /2016-imperative Excise (N.T.) dated 26 July,2016 issued with the aid of primary Board of Excise and Customs, it may be concluded that :
1) Excise duty liability will be payable at the time while an editorial of jewellery falling below heading 7113 is bought for the primary time (first sale) from the registered premises or from the centrally registered premises, or branches of such centrally registered premises, via the producer or essential manufacturer at such first sale cost.
think, on 1st April assesse bought a hundred unique articles in its exclusive showrooms at distinct gold quotes. Now the excise responsibility will should be discharged on the cumulative value of all the income taken together. It has not anything to do with the variations which can rise up on account of different rates of gold in its distinct showrooms across India.
2) In case of articles of jewellery, which are product of the treasured metallic provided by using the retail patron, the tariff cost can be same to the sum of the value of extra fabric used by the assesse for making such article of jewellery, labour charges charged with the aid of the assesse and the cost of precious steel supplied by using the retail consumer.
3) The law exempts the articles of jewellery which might be synthetic (i) from jewelry supplied by way of a retail consumer; or (ii) by way of mounting of precious stones provided via a retail purchaser, from a lot of the excise responsibility leviable thereon, as is in excess of the obligation of excise payable on a fee that’s sum of the cost of extra substances used by the assesse jeweller for making such article of jewelry and labour costs charged via the assesse jeweller from the retail patron provided following data are maintained:
name and address of retail customer.
Weight and purity of material furnished with the aid of patron.
Receipt quantity and date.
price of extra fabric used in manufacturing and labour prices.
four) No excise liability will arise on stock that turned into lying in unique showrooms or despatched on approval foundation as on 29th February.
5) The excise might be levied on stocks mendacity with the task employees or inside the region of manufacture (along with completed articles in addition to work in progress) as on 29th February.
6) The government has made rest in context of visits, issue of summons, seek, seizure, arrest and prosecution of the foremost manufacturer of articles of jewellery.
7) No excise obligation will be payable on the sale of traded articles of jewelry i.e. in which assessee is shopping for the manufactured jewelry from some other party and are just trading in such jewellery.
8) facts maintained for nation VAT will suffice for central excise functions also.
9) maintenance and alterations which do no longer alternate the identification, character and use of the goods and do no longer bring about a brand new item, is not “production” and will no longer entice excise responsibility.
10) No excise audit may be achieved for jewelry manufacturer in first two years if their responsibility liability at some point of the economic yr is much less than Rs.1 crore. Jewellers who are liable to pay obligation extra than Rs.1 crore but less than Rs.2 crore can be audited as soon as in each two years and jewellers who’re liable to pay obligation greater than Rs.three crore can be audited each yr. Such audit can be a table audit i.e. audit performed within the workplace of jurisdictional important excise audit commissionerate. furthermore, such audit will under no circumstances contain any physical verification of stocks in the premises.
eleven) the products once offered might be obligation paid items and if they may be lower back eventually, then the responsibility paid on such items will now not be refunded but on their next sale, no excise responsibility can be charged if required documentation is maintained in this regard.
12) each assesse shall preserve separate information for receipt and sale of manufactured and traded articles, indicating the particulars concerning description of the synthetic articles, on a daily basis.
thirteen) foremost Jeweller which gets articles manufactured on its behalf, on job paintings foundation shall obtain registration, keep debts, pay obligation leviable on such articles and observe all the applicable provisions of these policies, as though it’s far an assesse. The process worker shall no longer be required to get himself registered or shall now not be required to keep any document evidencing the procedures undertaken for the sole functions of challenge job paintings.
14) Jewellers exporting one hundred% of jewelry are not required to take Excise registration provided theyfurnish a financial institution assure.
15) Commissioner can go to and seek premises of jewelry manufacturer simplest if he has reason to believe that there is evasion of excise responsibility. however, seek cannot be undertaken for procedure or compliance associated topics.
sixteen) After complying with positive necessities in regard to documentation, assessee jeweller can do away with any inputs or semi-finished articles or completed articles for similarly processing, testing, restore, reconditioning, hallmarking, show in exhibitions or for every other cause inclusive of as samples, to a few different premises, with out fee of responsibility.
similarly, there may be a few issues which aren’t addressed on this write up. i’ve alluded handiest to the important thing highlights of the changes on this write up.
views expressed are strictly private. The content material of this document are totally for informational reason. it may or may not depict the prison position sought to be conveyed by the statute. It doesn’t represent professional advice or advice. Readers are cautioned to assess the real felony function before acting on this write up. the writer does not accept any liabilities for any loss or harm of any type springing up out of facts in this text and for any actions taken in reliance thereon.