Jewellers selling unbranded jewellery need not fear action if they do not deposit excise duty by the date set in the Budget.
The Finance Ministry has sent instructions to the field staff in this regard, which will remain effective till further orders.
This year's Budget had imposed one per cent excise duty on both unbranded and branded gold jewellery. The duty will be levied at the rate of 30 per cent of the transaction value. This means the effective duty rate will be just 0.3 per cent. The excise duty is to be paid only when the turnover exceeds Rs 5 crore.
The Central Board of Excise and Customs (CBEC) has asked the field staff not to take “action or quasi measure for registrations of jewellers and collection of levy till further orders.” This has been done after the Finance Minister's assurance to jewellers on revisiting the Budget proposal.
The instructions have been issued to clear the confusion. Normally, any excise duty notification is effective from midnight of the day of announcement. This year, the duty was made effective from 00 hours of March 17, 2012.
Accordingly, jewellers were required to deposit the duty for March 17-31 by March 31. For April, they are required to deposit the duty by May 5-6. If the duty is not deposited by the given date, the system will automatically start levying interest and credit facility will be withdrawn.
A Finance Ministry official also clarified that jewellers would be required to deposit duty only if the turnover exceeded Rs 5 crore a year. Since it is almost impossible for a small or unbranded jewellery seller to achieve this kind of turnover in one month, that is April, they will automatically be out of the excise net.
However, the official refused to give any indication about the fate of the proposal.
“The Finance Minister has not conveyed his intention regarding revisiting the excise duty proposal. We hope that a clear picture will emerge only by first week of May.” The Finance Minister is scheduled to reply on the Finance Bill after May 7.
This year's Budget proposal has not gone down well with jewellers, who shut down their shops all over the country for 21 days. After an assurance from the Finance Ministry, they suspended their agitation till May 11.