April 21, 2016 No.3
https://www.facebook.com/mehtarahulc/posts/10153439317996922
The in jewellery business --- please explain this
.
Say there are three jewellery MANUFACTURES A, B and C . Say A buys gold of Rs 1 crore, does some work. sells half finished jewels to B who sells it to C and C does some wok and sells to final retailer R.
.
Say the work done by each was about Rs 1 lakh Value addition in jewelleri is often only a small % of total gold value
.
Now say each jeweller decides to go for 1% flat and not 12.5% cenvat. Then will total excise paid be Rs 3 lakh (approx)?
.
===
.
Now say each of A , B and C decide to go for cenvat in which they can take input credit.
,
Then A has to pay excise of 12.5% on value addition of Rs 1 lakh or 12.5% on total price of Rs 1.01 crore !!?
.
I am getting different answers !!! Some say that A will have to pay excise of 12.5% on value addition ONLY !!! i.e. 12.5% on Rs 1 lakh i.e. Rs 12500 only. Some say that A has to pay 12.5% on Rs 1.01 crore !!! And A doesnt get any input credit as he is directly using raw gold !!
.
=============
.
Another big mess with excise on unbranded jewelries
.
Most jewellery manufactures sell to other jewelry manufactures or final shopkeepers without bills. eg Say a jewelry maker buys PURE gold of 100 gram and adds copper and makes jewelry. The shopkeeper will give him 102 gram of pure gold to 104 gram of pure gold depending on season, rates and quality of work and volume of work and weight of each piece !!! (pure = 99.99% pure) All barter, no cash, no cheque.
.
And another golden rule they follow is --- if A has sold gold or jewels to B, and if income tax raids B, then B will never tell A's name. And if B tells A's name, then A will simply say "he doesnt know B".
.
So now if a jeweller shopkeeper has say gold jewelry of Rs 10 crore, which is quite common, then he will be presumed as manufacture !!! And if he says that he is NOT manufacturer, then he will be asked to give names of manufactures which he cant. So he will be presumed as manufacturer himself and then charged with excise evasion !!!
.
IOW, it is a real mess for jewelry business
https://www.facebook.com/mehtarahulc/posts/10153439317996922
The in jewellery business --- please explain this
.
Say there are three jewellery MANUFACTURES A, B and C . Say A buys gold of Rs 1 crore, does some work. sells half finished jewels to B who sells it to C and C does some wok and sells to final retailer R.
.
Say the work done by each was about Rs 1 lakh Value addition in jewelleri is often only a small % of total gold value
.
Now say each jeweller decides to go for 1% flat and not 12.5% cenvat. Then will total excise paid be Rs 3 lakh (approx)?
.
===
.
Now say each of A , B and C decide to go for cenvat in which they can take input credit.
,
Then A has to pay excise of 12.5% on value addition of Rs 1 lakh or 12.5% on total price of Rs 1.01 crore !!?
.
I am getting different answers !!! Some say that A will have to pay excise of 12.5% on value addition ONLY !!! i.e. 12.5% on Rs 1 lakh i.e. Rs 12500 only. Some say that A has to pay 12.5% on Rs 1.01 crore !!! And A doesnt get any input credit as he is directly using raw gold !!
.
=============
.
Another big mess with excise on unbranded jewelries
.
Most jewellery manufactures sell to other jewelry manufactures or final shopkeepers without bills. eg Say a jewelry maker buys PURE gold of 100 gram and adds copper and makes jewelry. The shopkeeper will give him 102 gram of pure gold to 104 gram of pure gold depending on season, rates and quality of work and volume of work and weight of each piece !!! (pure = 99.99% pure) All barter, no cash, no cheque.
.
And another golden rule they follow is --- if A has sold gold or jewels to B, and if income tax raids B, then B will never tell A's name. And if B tells A's name, then A will simply say "he doesnt know B".
.
So now if a jeweller shopkeeper has say gold jewelry of Rs 10 crore, which is quite common, then he will be presumed as manufacture !!! And if he says that he is NOT manufacturer, then he will be asked to give names of manufactures which he cant. So he will be presumed as manufacturer himself and then charged with excise evasion !!!
.
IOW, it is a real mess for jewelry business
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