Nominal and easily compliable excise duty for the jewellery sector declared in Budget

Even for this nominal 1% excise duty, jewellery manufacturers are allowed to take credit of input services, which can be utilised for payment of duty on jewellery.

"However, articles of silver jewellery (other than those studded with diamonds, ruby, emerald or sapphire) are exempted from this duty. Moreover, an artisan or goldsmith who is employed on job-work basis in the jewellery manufacturing industry is not required to register with Central Excise, pay duty or file returns, which means only principal manufacturers will be levied duty under Rule 12AA of the Central Excise Rules, 2002," read a government statement.

An important feature of this new levy is the easy compliance with provision for online application for registration, payment of excise duty and filing of returns, with zero interface with the departmental officers because the central excise officers have been directed not to visit the premises of jewellery manufacturers. 

"Further, 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) alongwith a higher eligibility limit of Rs 12 crore (as against normal SSI eligibility limit of Rs 4 crore). Thus, a jeweller will be liable to pay the excise duty only if the turnover during preceeding financial year crosses Rs 12 crores," read the statement.