Jewellers to reopen shops as govt formally clears doubts

Excise to stay but Lahiri committee set up for procedural simplification, report in 2 months, no raids

After an entire day of confusion and mistrust on the leaders who negotiated with government officials on Saturday on the jewellery excise duty, the three-week strike by the trade is to end and business to resume as usual on Tuesday.

This will also bring huge buying, just ahead of the marriage season, for which many are waiting for the shops to open. The excise duty announced in the Union Budget is to stay and will be applicable with retrospective effect from March 1 — the duty for March may be paid with what is due for April.

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And, the Union finance ministry will constitute a committee to interact with the trade and allied industry on tax laws. To be chaired by former chief economic advisor Ashok Lahiri, with representatives from trade and industry, legal experts and officers from the ministry of commerce and industry, plus the central excise department, it is to give a report in 60 days. The terms of reference will include all issues related to the compliance procedure for the excise duty, including records to be maintained, forms to be filled, operating procedures and any other issues that might be relevant. Till the report comes, there will no raids, inspection or 'harassment' of jewellers, is the promise.

“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 invoices, provided the caratage/purity and weight of the gold/silver with precious stones, and carats of diamond/precious stones are mentioned on the invoices. The department will not conduct any arrest or criminal proceeding,” states a circular issued by the finance ministry on Monday evening.

It has directed the central excise department not to visit manufacturing units or shops or place of business or homes of jewellers. And, no search or seizure of stocks, the circular said.

Also, says the circular, export of jewellery will be allowed on self-declaration and a legal undertaking to the Customs, without the need to get this ratified by the department. The existing system will continue in this regard, it added.

“This has come as a major relief for us, as jewellers were seeking clarity from the government in writing,” said Mohit Kamboj, president, India Bullion and Jewellers Association (Ibja).

Earlier, based on assurances from Piyush Goyal, Union minister for energy, and the ruling Bharatiya Janata Party's president, Amit Shah, an estimated one-third of jewellers opened their shops but others kept these closed, as there hadn't been a written assurance from the government.

“This circular will help jewellers open their shops smoothly,” said Ashok Kumar Phophalia, general secretary, Delhi Jewellers Association.

According to trade sources, Rs 40,000–50,000 crore of loss was incurred due to the strike. The government had in the Budget proposed a one per cent excise levy without input credit and 12.5 per cent with input credit claim.