New Delhi, July 28 (KNN) 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.

In this connection, the Central Government has issued several notifications and circulars to give effect to the Sub-Committee’s recommendations.

The Committee seeks to amend notification No. 12/2012-Central Excise so as to prescribe 1% excise duty (without input and capital goods credit) on parts of articles of jewellery falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986), and to prescribe a criteria for classification of an articles of jewellery or part of articles of jewellery or both as that of a particular precious metal.

It also Seeks to partially exempt Central Excise duty on articles of jewellery falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986) manufactured by:

1. (a) re-conversion of jewellery given by the retail customer, or
2. (b) mounting of precious stone given by the retail customer.

The sub-committee also seeks to amend notification No. 8/2003-Central Excise dated 1st March, 2003, so as to increase for articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986):

1.  the SSI Exemption limit from Rs. 6 crore to Rs. 10 crore; and
2.  the SSI Eligibility limit from Rs. 12 crore to Rs. 15 crore.

It recommended amending notification No. 17/2011-Central Excise, dated the 1st March, 2011, so as to exclude handicrafts falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986), from the purview of excise duty exemption for “handicrafts”.

There were several other recommendations too made by the sub-committee. The notifications and circulars along with Joint Secretary (TRU-I)’ D.O. on the subject, can be downloaded from the CBEC website. (With PIB Inputs)