Government clarifies stand on jewellery excise, levy only on principal jewellery makers

NEW DELHI: The government has further clarified its proposal to levy 1% excise duty on jewellery to give comfort to jewellers who have been on strike for 17 days protesting the levy.

The Budget had imposed a 1% excise duty without input tax credit and 12.5% with input tax credit on articles of jewellery. It had subsequently announced measures to ensure that there is no harassment of trade because of the levy.

The MoF has issued more clarifications following a meeting of representatives of jewellery industry with revenue secretary and officials of the Central Board of Excise &Customs on March 17.

In case of jewellery manufactured on job work basis, the liability to take registration, pay duty and to file return will be on the principal manufacturer and not on the job worker, finance ministry said in a statement, addressing concerns that contract workers will suffer. Exemption from excise duty up to the Rs 6 crore limit is available to a jewellery manufacturer if his aggregate value of domestic clearances was less than Rs 12 crore in the preceding financial year.

Artisans and job-workers are not within the ambit of this duty and thus are not required to take registration, pay duty, file returns and maintain books of account. A jewellery maker with turnover less than Rs 12 crore in preceding FY and less than Rs 6 crore in current year is not required to file returns.