Impact of the budget 2012-13 on the Jewellery Industry

When gold is being purchased by the individual the economic position of the individual improves keeping the economic position of the country stagnant as the amount gets locked with the individual alone. In order to float the liquid fund in the market the Government would have doubled the tax on the Jewellery.

The question if people would still purchase gold even if the prices increase would be answered in a few days/ months.

The budget 2012-13 has been un favorable to the Jewellery Industry in general although the impact on Silver can not be said to be negative. The following points would draw you closer to the above said statement.

Sr No	Duty (Notified with effect from March 17, 2012)	Existing 2011-12	Proposed in the budget 2012-13
I	Customs Duty :
	On standard gold bars; gold coins of purity exceeding 99.5 per cent	2%	4%
	Platinum	2%	4%
	Non-standard gold	5%	10%
	Cut and polished, coloured gem stones at par with diamonds		2%
	Gold ore, concentrate and dore bars for refining and manufacturing gold	1%	2%
II	Excise Duty
	Excise duty on branded and unbranded precious metal jewellery: a. This duty is charged on tariff value  equal to 30 per cent of the transaction value. b. Small-scale exemption up to annual turnover not exceeding `1.5 crore for units having a turnover below ` 4 crore in the previous year. To compute turnover on the basis of tariff value  c. To place the onus of registration and payment on the person who gets jewellery manufactured on job-work Note: Excise duty on jewellery is being imposed without CENVAT credit,	1% only for branded precious metal jewellery	1% for all the precious metal jewellery
	Refined gold	1.5%	3%
	DTA [Domestic Tariff Area] clearances of plain gold jewellery manufactured by an EOU (Export Oriented Units)	5% ad- valorem	10% ad valorem
	Serially numbered gold bars , other than tola bars and gold coin of purity not below 99.5% manufactured during the process of copper smelting	2%	3%
III	TCS (Tax Collection at Source)
	Any purchase of bullion or jewellery in cash in excess of 2 lakhs is taxable.		Taxable

BENEFIT:

1. Gold coins of purity 99.5% and above and silver coins of purity 99.9% is exempted from Excise duty.

2. The Silver jewellery is exempt fully from Excise duty