Accepting the recommendations of a panel, the Finance Ministry has said that no excise audit will be carried out for the first two years, for units whose duty payment is less than Rs 1 crore (that is turnover of manufactured goods less than Rs 100 crore).
In view of large scale protests by jewelers following budget proposal of 1 percent excise duty on non-silver jewelers, the government had set up a sub-committee of the high-level committee to interact with trade and industry on issues relating to compliance, maintenance of records and other administrative matters.
The government has also decided, independent of committee’s recommendations, to increase for jewellery manufacturers “the SME eligibility limit from Rs 12 crore to Rs 15 crore and the SME exemption limit from Rs 6 crore to Rs 10 crore in a financial year and Rs 85 lakh for the month of March, 2016“. The government, in Budget 2016-17, had proposed 1 percent excise duty on jewellery without input credit or 12.5 percent with input tax credit on jewellery excluding silver other than those studded with diamonds and precious stones.
“Excise duty of 1 percent without input and capital goods tax credit or 12.5 percent with credit may apply to parts of articles of jewellery, made of platinum, gold and silver,” the government said while accepting the sub-committee’s recommendations submitted to it on June 23.
Also, there will be no requirement to submit any ground plan of premises for taking excise registration and the excise duty on jewellery is payable at first sale invoice value. “No excise duty may be payable on the sale of traded goods; (also) records maintained for State VAT and other private records, showing details of inputs, stocks, manufactured goods, sold/exported goods, etc to be accepted for excise purposes. Stock details to be maintained on weight and caratage basis,” it said.
“When a retail customer brings jewellery (other than in form of gold or any precious metal) to a jeweller which is converted into new jewellery by the jeweller or a job worker of such jeweller, excise duty will be payable only on value addition, including cost of additional materials and labour charges charged, subject to the maintenance of certain records,” the government said.
The jewel industry veterans feel that this will boost the trade as the industry was eagerly awaiting the clarifications on the levy of excise duty. They think that many important issues have been accepted by the government for the betterment of the trade.