EXCISE DUTY ON GOLD BULLION FROM 1ST MARCH 2016

[manoj lalwani]

Dear Experts

My client is a jeweller who purchases old gold ornaments from customers. These old gold ornaments are sent for refining. Labour charges is paid for refining . The refinery returns Gold Bullion with melting of 99.5 and above. My query is as follows

Q1. Whether Excise duty is payable by the jeweller who gets the refining done on job work basis, and sells the bullion recieved. If yes then at what rate and under which enrty .

Q2. Whether excise duty is payable by the jeweller who gets the refining done and uses the bullion recieved for mfg of new ornaments .

[KASTURI SETHI]

Sh.Manoj Lalwani Ji,

Point-wise reply is as under:-

Q.No.1 Your client's job-work is covered under Notification No.214/86-CE dated 25.3.86 as amended. In case final product is exempt, Central Excise duty is payable on the processes of job-work undertaken by the job-worker.If final product is dutiable, no duty is leviable on the job-work under Notification No.214/86-CE. Refining is manufacturing process. For valuation you will have to resort to Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Rate of duty is 1% (Without Cenvat) and 12.5% with Cenvat.

Q.No.2 Yes. On transaction value.

 

 

[manoj lalwani]

Thanx a lot sir

AI Summary

Excise duty on refined gold bullion: duty may apply to job-work outputs and on sales or use in manufacture. Refining of gold is a manufacturing process; if the final product is exempt, duty is payable on job-work processes, but if the final product is dutiable no duty is leviable on the job-work under the job-work notification. Valuation follows the excise valuation rules and Cenvat affects the effective rate. Where the jeweller sells the refined bullion, excise duty applies to that sale; where the bullion is used for manufacture of new ornaments, duty is payable on the transaction value.