Financial Daily from THE HINDU group of publications
Thursday, Mar 17, 2005
Financial Daily from THE HINDU group of publications Thursday, Mar 17, 2005 |
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Marketing
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Taxation Industry & Economy - Gems & Jewellery Confusion remains among jewellers on excise levy Sravanthi Challapalli
Chennai , March 16 THE uncertainty doesn't seem to have ended for jewellers, at least in the South. Though the Finance Ministry issued a clarification defining branded jewellery for the purpose of levy of two per cent excise duty, a provision mentioned therein leaves scope for confusion, according to them. The Tamil Nadu Jewellers' Federation, Madras Jewellery and Diamond Merchants Association, and the Gold Club of Chennai have sought further clarifications in this regard and are trying to meet the Finance Minister, Mr P. Chidambaram, to resolve the issue once and for all. The notice said that hallmarking, markings made by goldsmiths/job workers and the sign/mark/initials of the jeweller for the purpose of identification would not be treated as branded jewellery. However, jewellers wonder what to make of this statement in the clarification: " `ABC' jewellers advertises and sells its products under the brand `Star'. It also puts the same brand name or an abbreviation thereof or a mark which has a connection with such brand name on the article of jewellery. Such jewellery will be branded jewellery and will be liable to the tax." Most jewellers, traditional and branded, advertise their stores and products. While the jewellers say they are very clear that their products or business are not `branded', worry that the notification is not being followed in the right spirit exists - with some officials taking a narrow view of the word `advertised' and disregarding the rest of the clarification, according to them. Also, a notice issued by the Central Excise department to some jewellery stores is causing concern. It creates a "peculiar situation" of putting the onus on them by inviting them to come and get registered (with the department) if it comes under a brand. Quite a few jewellers have stopped advertising, according to advertising industry circles. Mr Tushar Mehta, Chairman, Gold Club of Chennai, and Senior Trustee, Mehta Jewellers, said: "We arrived at the rate of one per cent VAT after more than a year of discussions with the authorities. Let us give that a fair chance. If you add on two per cent excise duty to this, people simply won't buy and that will drag the jewellery business down." The jewellers are of the opinion that tax evasion will only increase if excise duty is levied. Customers will be willing to pay if there is an increase in the price of the raw material but just don't like to pay for other reasons such as making charges and wastage. It would be much simpler if the Government came out with a list of brands that would attract the excise duty, they added.
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