The Gold Bungling in Budget Notifications!
THE Gold excise duty has sent the gold merchants to their longest ever strike. And the CBEC has issued a clarification to allay the fears of the gold merchants. But while the clarification was being issued the CBEC also got issued a notification amending Notification No.2/2011.Cx dated 01.03.2011. WHY? It is really complicated.
By Notification No. 1/2011, a large number of goods were brought under excise net with a 1% duty, which included ‘articles of jewellery' with a brand name. This jewellery figured at Sl. No. 88 of the table to the notification. In this year's budget, this item was deleted from Notification No. 1/2011 and put in Sl. No. 199 of Notification 12/2012 Cx dated 16.03.2012. Why? The duty rate in Notification No. 1/2011 was raised to 2% from 1%, but they decided to retain jewellery at 1% with a nil duty for silver jewellery. Good intentions and well carried out.
But remember they had another Notification No. 2/2011 Cx with a 5% duty with CENVAT Credit. That notification also had branded Jewellery of heading 7113 and articles of precious metals of heading 7114 in Sl. Numbers 48 and 49. These items went missing during the Budget and our bright babus forgot to amend these entries. They have now amended Sl. Nos 48 and 49 to include jewellery (branded and unbranded) and articles of goldsmiths' or silversmiths' wares.
Without this amendment, unbranded jewellery would have suffered 2% duty without CENVAT Credit and 12% with Credit, instead of 6% now with credit.
With so much confusion in the Board, you can imagine the confusion that would have been created in the field. The striking jewellers were seen in groups visiting the offices of Central Excise and Consultants to know their liability.
Complying with tax laws is indeed a taxing task!
Notification No. , Dated: March 19, 2012