Manufacture - whether conversion of bullion to coins is manufacure?

[Jameskutty Antony]

Dear Colleages

Please give a reply to my query ASAP !

We buy Gold Bars and bullion and convert into gold coins and bars of smaller denominations by outsorucing the converison to a gold refinery on a job work basis. Coins and bars are then packed in a tamper proof packet and our logo is embossed (by the refinery only). We market the same under our brand name (not registered).

New budget has brought in 1% / 5% Excise duty on gold. Will our process be covered under manufacture? Whether we are convered under the new levy?

Thanks in advance

 

[Surender Gupta]

Articles of jewellery manufactured or sold under a brand name, if maufactured, have been brought into central excise net i.e. 1% or 5% duty.

Gold bars are aleady under central excise net - see central excise notification no. 5/2006 read with 5/2011

[Surender Gupta]

Further, gold coins in my view still falling under exemption list - Sr. no. 24 of central excise notification no. 5/2006 read with 5/2011

[Jameskutty Antony]

Sir

But the most important question is whether this conversion is manufacture? If it is manufacture, I have to pay ED.

[tushar aggarwal]

Plz answer whats d effective rate of gold coin in india?

AI Summary

Manufacture classification for gold coin conversion: whether job work conversion and branding attract excise duty on gold. Whether conversion of gold bullion or bars into smaller coins or bars by a refinery on a job work basis constitutes manufacture for central excise purposes and thus attracts the new excise levy is the central legal question; key facts include purchase of bullion, outsourcing conversion and embossing, tamper proof packing, and marketing under the purchaser's brand, and resolution depends on whether the refinery's operations change the goods' marketable form and on the applicable notification/exemption wording.