Practical
Guide to Excise Duty on Jewellers
Making
Compliances Easy
To Get your Copy Click on Link Below
Taxmann's Guide to Excise Duty on Jewellers by INMACS
INMACS has been
rendering highly professional and practical services to Indian and
International businesses, Manufacturing and Trading houses, exporters as well
as service providers. A solution to all complex issues is the unique selling
point of Inmacs.
The jeweller
community is being subjected to excise law and now excise registrations are to
be obtained before 31st July, 2016. I have participated in several
meetings with jewellers from all over India and have also interacted informally
at various levels of government to enable smooth implementation of proposed law
without any harassment to genuine jewellers.
We have
addressed various issues brought out during our interaction with the jewellers,
excise authorities, senior professionals and businessmen.
Sh. Arun
Jaitley, Finance minister had proactively set up a committee to examine
practical issues and problems likely to be faced by the Jewellers. The
committee is headed by Dr. Ashok Lahiri, Sh. Gautam Roy and representatives of jewellers and other
stakeholders. The committee has made very practical and detailed
recommendations. National Economic Forum, a leading NGO had also provided their
detailed research report to the Government. The Government of India has
accepted most of the recommendations of National Economic Forum and the Lahiri
committee. The initiative taken by the Government is reflected in large number
of notifications, circulars and amendments to rules.
I must
acknowledge support and guidance provided by CA Piyush Goyal, Minister of
Power, coal, mines and Non-conventional energy to my various initiatives. The
leadership of Sh. Narender Modi, Hon’ble Prime Minister of India has changed
approach of the revenue officials to highly positive and continuous process of
liberalisation and simplification has timely began.
Let us together
“Make in India” and “Start-up India, Stand up India” a great success.
I wish growth
and success to jewellers in India as well as in international markets.
New Delhi VINOD
JAIN
10th
August, 2016 LLB,
FCA, FCS, FCMA, DISA
Chairman - INMACS - +91-9811040004
ABOUT AUTHOR
 |
| ABOUT AUTHOR - INMACS Management Services Limited |
INMACS
Management Services Limited (INMACS, India) is a member of “INMACS Global, Hong
Kong” an international network of Chartered Accountants, Company Secretaries,
Lawyers and Management Consultants.
INMACS
Management Services Ltd. (INMACS) was started by a Group of highly qualified
and experienced professionals in April, 1984, to offer a full range of services
that embrace in its ambit Excise, Service Tax, VAT Income Tax and International
taxation of more than 100 countries. Besides, Management consulting, corporate
finance, Management Audit, Internal Audit, taxation, Business Agreements,
Private Equity, Real Estate and legal advisory services, risk management,
projects, start-ups, etc. Each step in its corporate association has taken it a
step closer to the fulfilment of its goal.
In the last 32
years, INMACS’ capabilities and performances have won the utmost trust and
confidence of a richly varied and strong client base ranging through small
& medium enterprises and big league corporate and multinational Business
Houses, both in India and abroad.
INMACS team
members, while sharing a common vision, belong to diverse technical, business
and legal backgrounds. We deploy specialized and multidisciplinary teams to
serve assignments requiring specific skills. This enables us to work proactively
and closely with clients and respond effectively to their needs in a highly
focused manner, which in today’s fast changing business environment is quite
crucial to a client’s success.
Our Offices:
New Delhi: 4696 Brij
Bhawan, 21 A Ansari Road, Darya Ganj, New Delhi -110002. Tel: +91 11 23288101
909, Chiranjiv Tower, 43, Nehru Place, New Delhi – 110019.
Tel: + 91 011 26223712, 6933, 8410
|
Gurgaon: Global Business
Square, Plot No. 32, Sector 44
Institutional Area Gurgaon 122002
Tel:
+91 124 4786200
|
Associate Offices in
India:
Bhubaneswar
|
Mumbai
|
Hyderabad
|
Jaipur
|
Kolkata
|
Indore
|
Chandigarh
|
Ahmedabad
|
Bengaluru
|
Chennai
|
Trichy
|
Ranchi
|
Kanpur
|
Pune
|
Associate
Offices outside India:
New Jersey (USA)
|
Tanzania
|
Mauritius
|
Nigeria
|
Hong Kong
|
St. Lucia
|
British Virgin Island
|
Dubai
|
Singapore
|
Kenya
|
Canada
|
London
|
BRIEF PROFILE OF OUR EXPERTS
CA
VINOD JAIN, a
commerce graduate from Shri Ram College of Commerce (1976) is a qualified
Chartered Accountant (1979), Company Secretary (1979), Cost Accountant (1983),
DISA (2004) and a Law Graduate (1979), has been an elected member of Central
Council of The Institute of Chartered Accountants of India for 12 years
(1998-2004, 2007-13).He has been past Chairman of NIRC (1983-84), Board of
Studies of the ICAI. He is chairman of INMACS group in India and a senior
partner of Vinod Kumar and Associates, Chartered Accountants. A Member of High
Powered Tax Simplification committee setup by Government of India
and Director in Coal India Limited. He is Fellow Member of all
the three professional bodies – ICAI, ICSI and ICWAI. Mr. Jain is the Founder
of All India Chartered Accountants Society. Mr. Jain is Convener of National
Economic Forum, a NGO undertaking research in micro and macro-economic
development of the country. Email ID - vinodjain@inmacs.com,
vinodjainca@gmail.com .
CA Aastha Jain, a commerce graduate from
Delhi University, is a qualified Chartered Accountant (2011), Company Secretary
(2012), and Masters in Business Finance (2013). She is an Associate Director
with Inmacs Management Services Limited, a consulting company, Gurgaon since August, 2011, Partner at Vinod
Kumar & Associates. She has worked for 3 years in Audit & Assurance of
Deloitte Haskins & Sells from 2007-2010.She has
also done Certificate Course in Indirect Taxes from ICAI in 2015. She
specializes in the field of Direct and International Taxation and Risk Advisory.
She is also co-founder of an e commerce start up named
Gocompany.in. Email-ID aasthajain@inmacs.com, aasthajain@vinodjainca.com
CA Ganesh Kanodia, a
commerce graduate from IGNOU (2014) and a qualified Chartered Accountant
(2014), possesses rich experience in Taxation and Auditing. He has good
exposure on matters related to indirect taxation consisting of Service Tax,
Central Excise and GST. Currently he is working with Inmacs Management
Services Limited a Gurgaon based consultancy firm as Deputy Manager. Email-ID ganeshkanodia@inmacs.com,
CA Sharad Maheshwari, a commerce graduate from University of
Rajasthan (2012) is a qualified Chartered Accountant (2014), possesses rich
experience in Direct Taxation, VAT, Excise, GST and Transaction advisory
services. Currently he is working with Inmacs Management Services Limited a Gurgaon
based consultancy firm as Deputy Manager. Email-ID sharadmaheshwari@inmacs.com,
To Get your Copy Click on Link Below
Taxmann's Guide to Excise Duty on Jewellers by INMACS
|
|
About the Author
|
I-5
|
|
Preface
|
I-7
|
|
Brief Profile of Our
Experts
|
I-9
|
|
CHAPTER
1
INTRODUCTION
|
|
|
•
Excise
Duty Re-introduced-2016
•
Simplified
Procedures for Jewellery Manufacturers
•
Important
modifications as interim arrangement
•
Constitution
of sub-committee of high level committee
•
Excise
Registration date extended to 1st July, 2016
•
National
Economic Forum (NEF) - Recommendations
•
Sub-Committee
of High level committee recommendations
|
2
6
10
11
12
12
17
|
|
CHAPTER
2
BASIC CONCEPTS OF EXCISE DUTY
|
|
|
•
Law
relating to Excise Duty
•
Excisable
Goods
•
Manufacture
and Production
•
Manufacturer
•
Principal
Manufacturer
•
Factory
Premises
•
CETA,
1985 - Classification of Articles of Jewellery
•
Precious
Metal
•
Deemed
Manufacture in CETA, 1985
•
Effective
rates on Articles of Jewellery
•
Brief
Description of Precious Metals and Stones
|
22
24
24
26
27
27
29
30
31
32
36
|
|
CHAPTER
3
REGISTRATION
|
|
|
•
Registration
of Factory/Warehouse
•
Procedure
of getting registered
•
Identifying
the limits for getting registered
•
Application
for registration
•
No
Physical Verification
•
Centralized
Registration
•
Exemption
from Registration
•
Alterations/Changes
in Registration
|
39
40
40
42
45
45
46
48
|
|
CHAPTER
4
HOW TO WORK POST REGISTRATION
|
|
|
•
Applicability
of Excise on opening Stock 50
•
Rate
of Duty to be charged 51
•
Payment
of Excise Duty 52
•
Valuation
for Excise Duty 54
•
First
sales invoice-Meaning 54
•
Sale
to Related Party 55
•
Excise
Invoicing 59
•
Articles
to be removed on “first sales invoice” 60
•
Excise
Department disclosures 63
•
Invoicing
to retail customer providing old jewellery 64
•
Invoicing
by unregistered Exempted manufacturer 65
•
Records
to be maintained 65
•
Returns
to be filed 70
•
Simplified
Quarterly return 70
|
50
51
52
54
54
55
59
60
63
64
65
65
70
70
|
|
CHAPTER
5
SELLING THE JEWELLERY FROM SHOWROOM
|
|
|
•
No
Registration of Showroom Business
•
Maintaining
Separate premises
•
Procedures
for separating the Showroom from Excise purview
•
Challenges
if manufacturer and the seller are virtually the same person
•
Precautions
by Jewellers Showroom
•
Maintaining
owned workshop
|
74
75
76
77
79
82
|
|
CHAPTER 6
MANUFACTURING JEWELLERY ON JOB WORK BASIS
|
|
|
•
Meaning
of Job Work
•
Meaning
of Job Worker
•
Records
by Job Worker
•
Suggested
Methodology
•
Disposal
of scrap and wastages generated at Job workers place
•
Procedure
for sending goods to job worker
•
Procedure
for sending finished goods by job worker
•
Alternate
Option to get Job worker registered as Manufacturer or Principal Manufacturer
|
84
85
85
86
87
87
88
89
|
|
CHAPTER 7
EXCISE BENEFITS FOR SMALL SCALE INDUSTRIES
(SSI)
|
|
|
•
Exemptions
to small units 90
•
Exemption
Limit for Jewellers 91
•
Computing
Exemption limits for SSI 92
•
Work/process
not amounting to manufacture 96
•
Other
procedural benefits to SSI 96
•
SSI
Exemption using Brand of others 97
•
Clubbing
of Clearances of SSI 99
|
90
91
92
96
96
97
99
|
|
CHAPTER
8
COLLECTION RULES – 2016
|
|
|
•
Introduction
to Collection Rules 2016
•
Procedure
of Discharging Central Excise Duty liability
•
Removal
of inputs or semi-finished articles or finished articles
•
Manner
of payment of duty
•
SSI
to pay duty on quarterly basis
•
Mandatory
E-payment of Excise duty
•
Consequences
of late payment of Excise Duty
•
Invoice
for selling Articles of Jewellery
•
Records
to be maintained
•
Daily
Stock Account of manufactured Goods
•
Daily
Stock Account of Traded Goods
•
Removal
of inputs or semi-finished articles or finished articles
•
Receipt
of Duty paid articles
•
Preserving
books of Account
•
Job
work in Articles of Jewellery
•
Work
Procedure for Job Work
•
Optional
Scheme for Manufacturers and Traders
•
Other
provisions of Central Excise Rules, 2002 to apply mutatis mutandis
|
101
102
102
103
103
104
105
105
106
107
107
108
109
109
109
110
111
115
|
|
CHAPTER 9
JEWELLERS - TREATMENT OF SPECIAL CASES
|
|
|
•
Branding
at Showroom location
•
Jewellery
received for Service or repair
•
Provision
for Returned Goods
•
Excise
Duty on Export
•
Treatment
of wastage, making charges and stone charges
•
Excise
Duty on sale of scrap
•
Excise
Duty liability on movement of Jewellery
•
Duty
payable in case Jewellery sold on EMI basis
•
Applicability
of CVD on importation of Jewellery
|
116
118
120
121
121
121
121
122
123
|
|
CHAPTER
10
CENVAT CREDIT RULES
|
|
|
•
Introduction
to CENVAT
•
Eligible
Input Service
•
Conditions
for availing CENVAT credit
|
124
125
126
|
|
CHAPTER
11
EXCISE AUDIT
|
|
|
•
Section
14A - Special audit in certain cases
•
Section
14AA - Special audit - Credit of duty availed or utilize is not within Limits
•
Audit
by excise officer
•
Legal
Backing
•
Audit
Requirement - Jewellers
•
Desk
Audit
•
No
Physical verification
•
Show
cause notice
•
Existing
circular/instruction
•
Decision
of Delhi High Court - Declaring departmental audit under Service tax illegal
|
127
127
128
128
129
129
129
129
130
131
|
|
CHAPTER 12
CONSEQUENCES OF NON-COMPLIANCES
|
|
|
•
Interest
for delayed payment
•
Penalties
for contravention of Excise laws
•
Personal
Penalty on Directors, Manager or Officer of the Company
•
Other
Miscellaneous penalties
•
Classification
of committing Offences
•
Imposition
of Fine and Imprisonment
•
Cognizable
and Non-Bailable Offences
•
Power
of Central Excise Officers
•
Power
to Summon, Visit or Search and Seizure
•
Provisional
release of seized goods
•
Power
to Confiscate the Goods
•
Guidelines
for Manufacturers of Articles of Jewellery
•
Clear
Reason to Believe of evasion
•
Not
to visit, summoned, search and seizure for procedure related matter
•
Visit,
Summon, Search and Seizure only where substantial duty evaded
•
No
visit or Search against Karigars/Artisans
•
Summons
only on approval of Commissioner
•
Visits
only on approval of Commissioner
•
Visit,
search and Seizure above expected evasion Rs. 75 Lakhs
•
Release
of Seized Goods under Supratnama
•
Power
to Arrest and Prosecute
•
Clear
Reason to Believe of evasion before arrest
•
Not
to Arrest and prosecute for procedure related matter
•
Arrest
only where substantial duty evaded - Minimum Rs. 200 lakhs
•
Vexatious
Search
|
133
134
135
135
136
137
138
138
138
139
140
140
141
141
141
141
142
142
142
142
143
143
143
144
144
|
|
ANNEXURES
|
|
|
ANNEXURE 1 - Stock Certificate from CA
ANNEXURE 2 - Draft Format of Excise Invoice
ANNEXURE 3 - List of records to be maintained
Guide to relevant Notifications, Circulars & Press Release
|
145
146
147
151
|
|
To Get your Copy Click on Link Below
Taxmann's Guide to Excise Duty on Jewellers by INMACS
