New Delhi: With jewellers on strike for a third day to oppose levy of excise duty, the finance ministry on Friday went into damage control clarifying that the one per cent levy on non-silver articles would be only for jewellers with Rs 12 crore turnover and not small traders.
It said that central excise officers have been directed not to visit the premises of jewellery manufacturers. The finance ministry said that Budget 2016-17 has proposed a nominal excise duty of one per cent (without input tax credit) and 12.5 per cent (with input tax credit) on articles of jewellery.
“Even for this nominal 1 per cent excise duty, manufacturers are allowed to take credit of input services, which can be utilised for payment of duty on jewellery,” it said.
The ministry said that articles of silver jewellery [other than those studded with diamonds, ruby, emerald or sapphire] are exempt from this duty. It said the Budget provides for excise duty exemption limit of Rs 6 crore in a year for small scale industries in the jewellery business (as against normal limit of Rs 1.5 crore). “Thus, only if the turnover of a jeweller during the preceding financial year was more than Rs 12 crore, he will be liable to pay the excise duty,” the statement said.
Jewellers having turnover below Rs 12 crore during the preceding financial year will be eligible for exemption up to Rs 6 crore during the fiscal. “Such small jewellers will be eligible for exemptions up to Rs 50 lakh for the month of March 2016,” it said.
