Smaller jewellers, excise dept fight over 'branded jewellery'

AHMEDABAD: Smaller jewellers and the excise department are at loggerheads over the interpretation of an announcement made in Budget 2011.

The unorganised sector commands 90% of the jewellery market in India. An excise duty of 1% was imposed on jewellery (of gold, silver, platinum, palladium, rhodium, iridium, osmium or ruthenium) manufactured or sold under a brand name during this year's budget.

Family jewellers and regional players say they don't fall into the category of branded players. With the Central Board of Excise and Customs sending notices to jewellers especially across Gujarat and Maharashtra, jewellers are looking at legal options. A Surat-based family jeweller who didn't want to named said, "It is a major concern... with notices being sent in the past few days. They have told us that if we put any mark or sell in a jewellery box or pouch or bag containing shop name, then they will consider it as branded."

Jewellers rued that this move was in stark contrast to an earlier move by government to ensure jewellers register their companies and make only hallmarked jewellery.

"The government tried to implement such a policy in 2005-06 but discontinued it, thereby promoting regional family jewellers. We intend to start an agitation, after taking a legal opinion," he said. An excise department official in Ahmedabad said, "the process of sending notification has begun and we are asking them details like how much branded jewellery are they selling and in which segment?"

Jewellers who are maintaining websites, giving regular advertisements, making stylised initial marks similar to the company logo on their jewellery are being sent the notices, he added. Ahmedabad-based Zaveri & Co jewellers director Zaveribhai Zaveri said jewellers were concerned.

"At this stage, we don't know if we have to pay the 1% excise duty as we are not branded jewellers but family jewellers. Incidences of family jewellers being asked to pay the excise duty have been reported in other states too," he said.

But Gem and Jewellery Export Promotion Council vice-chairman Sanjay Kothari said the issue had been discussed earlier with the authorities and it had been made clear that family jewellers were not part of the branded segment.