Date:05/03/2005 URL: http://www.thehindubusinessline.com/2005/03/05/stories/2005030502000400.htm

Back What is branded jewellery? Finance Ministry clarifies

Our Bureau

New Delhi , March 4

THE Finance Ministry on Friday clarified that an excise duty of 2 per cent would be levied on branded articles of jewellery only if the brand name or the trade name, as defined, was indelibly affixed or embossed on the article of jewellery itself.

The Finance Minister, Mr P. Chidambaram, had in his Budget speech announced that an excise duty of 2 per cent would be levied on branded jewellery.

The Revenue Department has now clarified that the duty would be applicable only if the jewellery was manufactured and sold under brand names.

In order to attract this levy, the article of jewellery must be marketed and sold under a brand name, an official release said. Stating that there had been some misgivings among a section of the trade about the scope of this levy, the release said the Government has now issued instructions about the scope of levy on branded jewellery.

Further, the Finance Ministry has also held that "hallmarking" cannot be considered as "branding" for the purpose of excise levy.

"As regards `hallmarked' gold jewellery, `hallmarking' is in the context of accurate determination and official recording of the proportionate content of precious metal in gold.

Hallmarks are thus only official marks used as a guarantee of purity or fineness of gold jewellery, and cannot be treated as `branding' for the purposes of the excise levy," the release said. The Revenue Department has also held that the marking made by gold smiths/job-workers to identify that the article of jewellery was received from a particular goldsmith, etc., cannot be considered as branded jewellery.

Also, the distinctive sign/mark/initial put on by a jeweller for the purpose of identification cannot be considered as sale of branded jewellery and therefore would not attract excise duty.

However, if a jeweller advertised and sold his products under a brand name and 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 would be considered as branded jewellery and would be liable to excise duty.