Govt accepts Lahiri report on jewellery trade levy

The Union government has decided to increase the small scale unit (SSI) eligibility limit and exemption limit for gold jewellery manufacturers.The decision was taken on the report of the committee appointed under the chairmanship of Ashok Lahiri, former chief economic advisor, in the aftermath of jewellers’ strike last March to oppose excise duty.The SSI eligibility limit has been raised from the present Rs 12 crore to Rs 15 crore

and the SSI exemption limit from Rs 6 crore to Rs 10 crore in a financial year.The government has also accepted other recommendations of the panel, which had representatives from the trade. It had suggested several relaxations in the  tax laws on issues relating to compliance procedure for the excise duty, records to be maintained and related administrative issues.   in this year’s Budget, an excise duty of one per cent without input and capital goods credit or 12.5 per cent with input tax credit  was imposed on articles of jewellery. Jewellers then went on strike, for 42 days. The committee report came on June 23. It recommended there be no requirement to send any ground plan of premises for taking excise registration. Various other procedural relaxations it suggested have also been approved. among others, the records maintained for state value added tax and other private records, showing details of inputs, stocks, manufactured goods, sold/exported goods, etc, would be accepted for excise purposes. Stock details have to be maintained on weight and caratage basis.

GETTING THE SHEEN BACK

The small scale unit eligibility limit has been raised from  Rs 12 crore to Rs 15 crore and the SSI exemption limit from Rs 6 crore to Rs 10 crore in a financial year

In this year’s Budget, an excise duty of one per cent without input and capital goods credit or 12.5 per cent with input tax credit  was imposed on articles of jewellery

The committee also recommended not to carry out an excise audit for the first two years for units whose duty payment (cash plus credit) is less than Rs 1 crore

Movement of jewellery which does not involve sale would not be liable for excise duty. And, there will be no transit checks by excise officers, among the biggest of fears in the trade.

The government will also work on an optional scheme, following the committee’s recommendation, for jewellers who are not able to maintain separate physical stocks and/or records of manufactured and traded goods. For availing the optional scheme, a principal manufacturer of jewellery shall maintain separate stocks on weight and/or carat basis separately for silver studded jewellery, gold or platinum jewellery studded with diamonds, and other gold or platinum jewellery [that is other than gold or platinum jewellery.

The committee also recommended not to carry out an excise audit for the first two years for units whose duty payment (cash plus credit) is less than Rs 1 crore [that is, annual turnover of manufactured goods less than Rs 100 crore]. There will be no visit, search and seizure at job workers’ premises, except on the basis of specific intelligence and with approval of a commissioner or equivalent rank officer. All these have been accepted.