EXCISE ON JEWELLERY: GRANT EXEMPTION FROM DUTY OF EXCISE (First Clearance of Jewellery upto an aggregate value not exceeding six crore rupees)

NOTIFICATION NO.8/2016-C.E., DATED 1-3-2016

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 8/2003-Central Excise dated the 1st March, 2003, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 138 (E) dated, the 1st March, 2003, namely :—

In the said notification,—

EXCISE ON JEWELLERY : NOTIFICATION NO.8/2016-C.E. (N.T.), DATED 1-3-2016

In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules further to amend the Central Excise Rules, 2002, namely:—

1. (1) These rules may be called the Central Excise (Amendment) Rules, 2016.

(2) They shall come into force from the 1st April, 2016 except the provisions of rule 2, rule 3, rule 4 and rule 7, which shall come into force from the 1st of March, 2016 and the provisions of clause (v) of rule 5 and rule 6, which shall come into force from such date as the Central Government may, by notification, specify.

—-

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3. In the said rules, in rule 8, in the second proviso, for Explanation -1, the following shall be substituted, namely:—

“Explanation-1. – For the removal of doubts, it is hereby clarified that,—

EXCISE ON JEWELLERY : NOTIFICATION NO.12/2016-C.E., DATED 1-3-2016

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.12/2012-Central Excise, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 163(E), dated the 17th March, 2012, namely: —

In the said notification,—

—

(B) in the Table,—

—–

(xv) for serial number 199 and the entries relating thereto, the following shall be substituted, namely:—

EXCISE ON JEWELLERY :CENVAT CREDIT (THIRD AMENDMENT) RULES, 2016

NOTIFICATION NO.13/2016-C.E. (N.T.), DATED 1-3-2016

In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:—

1. (1) These rules may be called the CENVAT Credit (Third Amendment) Rules, 2016.

(2) Save as otherwise provided, they shall come into force on the 1st day of April, 2016.

…….

………

4. In rule 4 of the said rules,—

EXCISE ON JEWELLERY : CLARIFICATIONS ON LEVY IMPOSED ON JEWELLERY

PRESS RELEASE, DATED 4-3-2016

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.

            Some 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 31^st 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 Manual].

Useful link:http://www.cbec.gov.in/htdocs-cbec/ub1617/do-ltr-jstru1-revised.pdf

Excise on Jewellery :-Government clarifies to the Jewellery Industry about the issues relating to imposition of Excise Duty on articles of Jewellery with simplified procedures.

 PRESS RELEASE, DATED 18-3-2016

In the General Budget for 2016-17, a nominal excise duty of 1% [without input tax credit] and 12.5% [with input tax credit] has been imposed on articles of jewellery with simplified procedures.  Salient features of the simplified procedures for this levy have been explained vide press release issued by the Government on 4^th of March, 2016.

            In this connection, on 17^th of March, 2016, a number of representatives of jewellery industry met Secretary (Revenue), Government of India and Chairman (Central Board of Excise &Customs) to discuss the concerns regarding imposition of this levy.

            During the meeting, the aforesaid representatives inter-alia raised the following issues:

a) Re-imposition of levy will bring back regime of erstwhile Gold control Act leading to harassment of Jewellers, especially artisans and small goldsmiths.

b) This will also result in visits of Inspectors to the Jewellers thereby bringing back the days of Inspector Raj.

c) Who has to take excise registration and file return?

d) What documents are to be maintained for excise purposes?

            The representatives of industry also requested for increase in exemption limit of Rs. 6 crore in a year to Rs.10 crore, and urged for an early consideration of the same.

            Regarding concerns relating to procedures and compliance to the levy, the representatives of industry were informed that all these issues have already been clarified vide Chairman’s D.O. letter dated 3^rd March, 2016 to field formations and the Press release dated 4^th March, 2016, copies of which were also provided to them.

 Further, in the meeting, the following was clarified:

a) In case of jewellery manufactured on job work basis, the liability to take registration, pay duty and to file return is on the principal manufacturer and not on the job worker.

b) Further, exemption from excise duty up to the clearance limit of Rs. 6 crore is available to a jewellery manufacturer if his aggregate value of domestic clearances is less than Rs. 12 crore in the preceding financial year.

c) Artisans and job-workersare not covered within the ambit of this duty and thus they are not required to take registration, pay duty, file returns and maintain any books of account.

d) A jewellery manufacturer having turnover less than Rs. 12 crore during the preceding financial year and less than Rs. 6 crore in the current financial year is not required to take registration and file return.

e) Application for excise registration as well as returns can be filled online [https://www.aces.gov.in/].

f) Directions have been issued to the field formations to provide hassle free registration within two working days. There will be no post registration physical verification of the jeweller’s premises.

g) There is no requirement of declaring pre-budget stocks. Directions have also been issued barring any visits to the jeweller’s premises.

h) Jeweller’s private records or his records for State VAT or for Bureau of Indian Standards (in the case of hallmarked jewellery) would be accepted for all Central Excise purposes.

Useful links:

1)      http://www.cbec.gov.in/htdocs-cbec/ub1617/do-ltr-jstru1-revised.pdf

http://pib.nic.in/newsite/mbErel.aspx?relid=137342

EXCISE ON JEWELLERY :CONSTITUTION OF SUB-COMMITTEE OF HIGH LEVEL COMMITTEE TO INTERACT WITH TRADE & INDUSTRY ON TAX LAWS

CIRCULAR NO.1021/9/2016-CX, DATED 21-3-2016

In the Budget 2016-17, Central Excise duty at the rate of 1% (without input tax credit) and 12.5% (with input tax credit) has been imposed on all articles of jewellery (except for silver jewellery, other than those studded with diamond, ruby, emerald or sapphire).

2 In this regard, it has been decided to constitute a Sub-Committee of the High Level Committee to Interact with Trade & Industry on Tax Laws, chaired by Dr. Ashok Lahiri, which will consist of:

The composition of the Sub-Committee will be circulated once the names of its members are finalized.

3. All associations will be given an opportunity to submit representation before the sub-committee in writing and the all India associations to state their case in person.

4. Terms of reference of the Sub-Committee will include the issues related to compliance procedure for theexcise duty, including records to be maintained, forms to be filled including Form 12AA, operating procedures and any other issued that may be relevant. The Sub-Committee will submit its report within 60 days of its constitution.

5. Till the recommendations of the Sub-Committee are finalized, the following shall be adhered to:

6 The registration of the establishment with the central excise department can be taken within 60 days from 1st March, 2016. However, the liability for payment of central excise duty will be with effect from 1st March, 2016, and as a special case for the month of March, 2016, the assessee jewellers will be permitted to make payment ofexcise duty along with the payment of excise duty for the month of April, 2016.

7. Any further communications with the regard to the aforesaid Sub-Committee may be addressed to the office of the High Level Committee (HLC), Suite NO. 215, the Janpath Hotel, Janpath Road, opp. BSNL Building, New Delhi-110001.

8. Wide publicity may be given to this circular. Difficulty, if any, in implementing the circular should be brought to the notice of the Board.

EXCISE ON JEWELLERY : CONSTITUTION OF SUB-COMMITTEE OF HIGH LEVEL COMMITTEE TO INTERACT WITH TRADE AND INDUSTRY THEREON

CIRCULAR NO.1025/13/2016-CX, DATED 22-4-2016

In continuation to the Circular No. 1021/9/2016-CX dated 21-3-2016, issued vide F. No. 354/25/2016-TRU, the composition of the Sub-Committee referred to therein would be as under:

2. Names of the trade representatives in the Sub-Committee would be decided in consultation of with Dr. Ashok Lahiri, Chairman of the Sub-Committee.

3. Terms of reference of the Sub-Committee will include the issues related to compliance procedure for theexcise duty, including records to be maintained, operating procedures and any other issues that may be relevant.

4. All associations will be given an opportunity to submit representation before the Sub-Committee in writing and the all India associations to state their case in person.

5. Any further communications with the regard to the aforesaid Sub-Committee may be sent through e-mail to highlevelcommittee@gmail.com or by post addressed to the Office of the High Level Committee (HLC), Suite No. 215, The Janpath Hotel, Janpath Road, Opp. BSNL Building, New Delhi-110 001.

6. Wide publicity may be given to this circular.

Excise on Jewellery :nominated members of Sub-Committee:

CIRCULAR NO.1030/18/2016-CX, DATED 18-5-2016

In continuation to the Circular No. 1025/13/2016-CX, dated 22-4-2016 issued vide F. No. 354/25/2016-TRU, the following trade representatives are nominated as members of the aforesaid Sub-Committee:

2. Wide publicity may be given to this circular.

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