‘House-Marked’ Indian Jewelry Exempted From Tax

(IDEX Online News) – The Indian government has exempted jewelry that has a ‘house identification mark’ on it from the payment of excise duty. The much-awaited clarification had come from the Ministry of Finance’s Tax Research Unit, said Bachhraj Bamalwa, chairman of the All India Gem & Jewellery Trade Federation (GJF).

The issue arose last year, as the government, in a preparatory move towards introducing a unified General Services Tax (GST) issued a notification that brought branded jewelry under excise duty.

GST will replace the current slew of central and state government taxes.

The duty is one percent; however, the interpretation of the term ‘branded’ was left ambiguous.

The vast majority of Indian jewelry, is unbranded, but usually carries a small imprint by the retailer to enable its identification when brought back to the store for a trade-in or sale for cash. In the eyes of many local authorities, these so-called ‘house identification marks’ constitute branding.

Based on the ministry clarification, the GJF’s legal advisor has said that ‘house marks’ for the purpose of identification only are exempt and that no excise duty is payable even if the mark is on the packaging material, warranty card or certificate that a retailer might issue.

The legal advisor has also noted that this clarification is retroactive and that those retailers that have been issued notices by the government on this issue can now ask the concerned departments to cease and desist from all proceedings.