Download Document

Circular No. 1043/31/2016 - CX

F. No. 354/25/2016 - TRU (Pt.-I)
Government of India
Ministry of Finance
(Department of Revenue)
Tax Research Unit
RRERE
New Delhi, the 26" July, 2016
To,
Principal Chief Commissioners / Chief Commissioners of Central Excise (All);
Principal Chief Commissioners / Chief Commissioners of Customs & Central Excise (All);
All Director Generals of Customs, Central Excise & Service Tax
Madam / Sir,
Subject: General procedures regarding excise duty on articles of jewellery or parts of
articles of jewellery or both falling under heading 7113 —regarding
In this year’s Budget, central excise duty of 1% without input and capital goods tax
credit or 12.5% with credit was imposed on articles of jewellery falling under heading 7113
of the First Schedule to the Central Excise Tariff 1985. Subsequent to that, the Government
had set up a Sub-Committee of the High Level Committee, headed by Dr. Ashok Lahiri to
interact with Trade & Industry on issues relating to procedure and compliance relating to
excise duty of articles of jewellery. The Sub-Committee has given its report on 23.06.2016,
which has been accepted by the Government.
2. In the above context, for manufacturers/principal manufacturers of articles of
jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central
Excise Tariff Act [hereinafter referred to as articles of jewellery], the Sub-Committee has
made certain recommendations, which have been accepted by the Government and
accordingly, it is hereby clarified that:
i. A manufacturer or principal manufacturer of articles of jewellery may also do
trading of articles of jewellery from his central excise registered premises.
ii. For a jeweller [above the SSI excise duty exemption limit]:
(a) in case his first sale invoices show excise duty separately, the same will
have to be paid to the Government; and
(b) in case his sale invoices do not show separately the excise duty, the value
for VAT will be treated as cum excise duty value [that is value for excise
duty plus excise duty] and duty payable will have to be determined
accordingly.

iii. No excise duty will be payable on the sale of traded articles of jewellery [on which
appropriate excise duty, including nil duty, has already been paid].
iv. Records maintained for State VAT and other private records, showing details of
inputs, stocks, manufactured goods, sold/exported goods, etc., as per the scheme
opted by the jewellery manufacturer [Refer rule 12 of the Articles of Jewellery
(Collection of Duty) Rules, 2016], will suffice for central excise purposes also.
v. For articles of jewellery manufactured on job work basis, the procedure as
prescribed in the Articles of Jewellery (Collection of Duty) Rules, 2016 is to be
followed. Accordingly, the procedure prescribed for job work under notification
No. 214/86-CE will not be applicable on manufacture of articles of jewellery on
job work basis.
vi. Repairs and alterations, which do not change the identity, character and use of the
goods and do not result in a new item, is not “manufacturing” and will not attract
excise duty.
3. Hindi version will follow. Trade Notice/Public Notice may be issued on the above
lines.
4. Difficulties faced, if any, in implementation of this Circular may be brought to the
notice of the Board.

~(Anurag Sehgal)
Under Secretary to the Government of India