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Excise Duty On Jewellery

i) The excise duty on precious metal jewellery was introduced in 2011 at a rate of 1% for branded goods and has now been extended to unbranded goods as well. ii) Jewellery includes objects of personal adornment and items normally carried on the person. iii) Duty is charged on the tariff value of 30% of the transaction value declared on invoices.

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Vikash Surana
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87 views

Excise Duty On Jewellery

i) The excise duty on precious metal jewellery was introduced in 2011 at a rate of 1% for branded goods and has now been extended to unbranded goods as well. ii) Jewellery includes objects of personal adornment and items normally carried on the person. iii) Duty is charged on the tariff value of 30% of the transaction value declared on invoices.

Uploaded by

Vikash Surana
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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DUTY ON ARTICLES OF PRECIOUS METAL JEWELLERY (CHAPTER HEADING 7113) The scheme of levy of excise duty on precious metal

jewellery was introduced in the Budget 2011 vide notification No. 1/2011. Under the this scheme excise duty of 1% ad valorem 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) at the same rate of duty of 1%. ad valorem . ii) For the purposes of heading 7113, the expression articles of jewellery means: (a) any small objects of personal adornment (for example, rings, bracelets, necklaces, brooches, ear-rings, watch-chains, fobs, pendants, tie-pins, cuff-links, dress-studs, religious or other medals and insignia); and (b) articles of personal use of a kind normally carried in the pocket, in the handbag or on the person (for example, cigar or cigarette cases, snuff boxes, cachou or pill boxes, powder boxes, chain purses or prayer beads) (c) These articles may be combined or set, for example, with natural or cultured pearls, precious or semi-precious stones, synthetic or reconstructed precious or semi-precious stones, tortoise shell, mother-of-pearl, ivory, natural or reconstituted amber, jet or coral. iii) Duty would be chargeable on tariff value under section 3 of the Central Excise Act which shall be equal to 30% of the Transaction value declared on the invoice. iv) Transaction value means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. v) 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 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 made on the basis of the tariff value i.e. taking 30% of the transaction value and not full transaction value. vi) It is important to note that the exemption limit for the remaining part of 2011-12 i.e. between 17th March, 2012 and 31st March, 2012 is not being curtailed for manufacturers of unbranded jewellery who would come into the tax net afresh. In other words, eligible manufacturers/ factories would be entitled to exemption for the full threshold limit of `1.50 crore for this period. vii) For manufacturers who are already availing of the SSI exemption during 2011-12 also the computation of the exemption limit would have to be made on the basis of tariff value of clearances effected during the period from 17th March, 2012 to 31st March, 2012 by virtue of Explanation (C)(ii) of notification no.8/2003-CE dated 1.3.2003. viii) Illustration- If a manufacturer X clears goods of value 1.4 crore till 16th March 2012, and from 17th March 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:a) Value of clearances from 1st April 2011 to 16th March 2012=` 1.4 crore b) Value of clearances from 17th March to 31st March 2012=` 9 lacs (30% of transaction value 30 lacs) c) Total value of clearances financial year 2011-12= 1.49 crore ix) Excise duty on gold jewellery sold from EOUs into DTA has been increased from 5% to 10%. x) JOB WORK: Rule 12AA of the Central Excise Rules has been amended to provide that 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 option to the job-worker to register, if he so desires, has been deleted. xi) MANUFACTURE: The process of affixing or embossing trade name or brand name on articles of jewellery or on articles of goldsmiths or silversmiths wares of precious metal or of metal clad with precious metal, shall amount to manufacture.

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