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Circular No. 1021/9/2016-CX
F.No. 354/25/2016-TRU
Government of India
Ministry of Finance
Tax Research Unit
k*k*
New Delhi, the 21st March, 2016
To,
Principal Chief Commissioners / Chief Commissioners of Customs (All)
Principal Chief Commissioners / Chief Commissioners of Customs & Central Excise (All)
Sir / Madam,
Subject: Imposition of Central Excise duty on jewellery — Constitution of sub-committee
of the High Level Committee —-regarding
In the Budget 2016-17, Central Excise duty at the rate of 1% (without input tax credit)
and 12.5% (with input tax credit) has been imposed on all articles of jewellery (except for
silver jewellery, other than those studded with diamond, ruby, emerald or sapphire).
2 In this regard, it has been decided to constitute a Sub-Committee of the High Level
Committee to Interact with Trade & Industry on Tax Laws, chaired by Dr. Ashok Lahiri,
which will consist of:
a. three representatives of the trade [to be decided by the Government];
b. one legal expert [to be decided by the Government];
c. officer concerned from the Ministry of Commerce & Industry [MoC&I] to be
nominated by the MoC&I; and
d. high level officials from the central excise department to be nominated by the
Central Board of Excise and Customs.
The composition of the Sub-Committee will be circulated once the names of its members are
finalized.
3 All associations will be given an opportunity to submit representation before the sub-
committee in writing and the all India associations to state their case in person.
4. Terms of reference of the Sub-Committee will include the issues related to
compliance procedure for the excise duty, including records to be maintained, forms to be
filled including Form 12AA, operating procedures and any other issued that may be relevant.
The Sub-Committee will submit its report within 60 days of its constitution.
Ds Till the recommendations of the Sub-Committee are finalized, the following shall be
adhered to:

6
a)
b)
d)
e)
All payments of central excise duty will be based on first sale invoice value;
The central excise authorities will not challenge the valuation given in the invoice
provided the caratage / purity and weight of the gold/silver with precious stones; and
carats of diamond/precious stones are mentioned on the invoice;
The central excise officers will not visit the manufacturing units/ shops/ place of
business/residence of the jewelers;
No arrest or criminal prosecution of any jeweler will be done;
No search or seizure of stocks by any central excise official will be effected;
Exporters will be allowed to export on self declaration and submission of LUT to
customs without the need to get LUT ratified by central excise. Prevailing system will
continue.
The registration of the establishment with the central excise department can be taken
within 60 days from 1‘ March, 2016. However, the liability for payment of central excise
duty will be with effect from 1** March, 2016, and as a special case for the month of March,
2016, the assessee jewelers will be permitted to make payment of excise duty along with the
payment of excise duty for the month of April, 2016.
7 Any further communications with the regard to the aforesaid Sub-Committee may be
addressed to the Office of the High Level Committee (HLC), Suite No. 215, The Janpath
Hotel, Janpath Road, Opp. BSNL Building, New Delhi-110001.
8. Wide publicity may be given to this circular. Difficulty, if any, in implementing the
circular should be brought to the notice of the Board. Hindi version would follow.
Yours faithfully,
rr
jy broek!
K. Kalimuthu
Under Secretary