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Centralized Registration in Central Excise for Jewelry


Centralized Registration in Central Excise for Jewelry

The Finance Minister in 2017, implemented Centralized registration for jewelry to levy of excise duty at the rate of 1% devoid of input tax credit to ease the taxation process for Goods and Services Tax. The implementation also added 12.5% with an input tax credit on articles of jewelry exclusive of silver jewelry, other than studded with diamonds/other precious stones. Nevertheless, the exemption for a jewelry manufacturer shall apply on first clearances up to Rs.6 crores for a financial year. However, it applies if the total domestic clearance during the preceding financial year results in less than Rs.12 crore.

The Ministry, upon receiving feedback for the implementation of Single/Centralized Registration in Central Excise for Jewellery, the CBEC promised zero physical interfaces with tax officials, trouble-free as well as for registration. The Government shall also form a subcommittee of the High-level committee to learn any issues in this regard. Further, the Ministry intends to include gold jewelry within the tax net in the process of Centralized Registration. The move shall provide support to monitoring the movements of black money to establish the Goods and Services Tax regime further.

Should the Jeweler/Manufacturer provide particulars of all the premises (including that of job work) in the application for Centralized registration in Central Excise for Jewellery?

Any Jeweler/Manufacturer opting for Centralized registration should provide the details of the supply on all the premises regarding the place of manufacturing. Nevertheless, Jeweler/Manufacturer may opt not to provide the details of the job worker premise. The implementation also includes no seizure at the work premises and no requirement to submit any ground plan for the manufacturing unit.

Can the assessee allot multiple manufacturing units under the Centralized registration?

Yes. The Ministry issued a notification under Rule 9(2) of the Central Excise Rules in 2002, allowing for a voluntary centralized central excise registration for Jewellery manufacturers with central billing or accounting system. The manufacturer shall choose a Centralized billing or accounting system for registering only the factory or premises or office, from where such Centralized billing or accounting is completed. However, the manufacturer shall retain details on the accounts/records mentioning receipts of raw materials and finished exercisable goods produced or received back from job workers.

In the occurrence of a Manufacturer obtaining centralized registration at his showroom, is it deemed essential to bring the goods to the showroom from the workshops on the basis of excise invoice?

The workshops denote the locations of manufacture (i.e., factory). The showroom i.e., A Centralized registered place, acts as the single place of removal. Consequently, the goods should shift from the place of manufacture (workshop) to place of registration (showroom) on the basis of the excise invoice. The invoice shall increase from the registered premises and transferred to the workshop to go along with the goods during the process of physical movement.

Alternative to centralized registration for the manufacturer

The manufacturer may acquire separate registration for each and every workshop (factories) as an alternative to obtaining Centralized registration.

Which option is better, that of centralized registration or separate registration?

Centralized registration or separate registration depends upon the business model implemented by the manufacturer.
In a broad spectrum, the manufacturer shall choose the workshop as a nodal workshop, upon necessity. The nodal workshop relates to the place to maintain all the records of the company. This could not insist on the requirement to take the process of registration at the showroom, which may be utilized completely for the trading of goods received from the workshops along with goods bought from others for trading. The proprietor of the showroom might register as Input Service Distributor. The provision to the proprietor in the case to provide the credits on the input services to the workshops.