The Gold Excise - When to Register - Board Creates Confusion
THE Gold merchants are a worried lot; they have understood that the Government is not going to roll back the 1% excise duty. The Government has assured them that there would be no Inspector Raj and things are quite simple. But many are scared of the brilliant excise officers and the old timers recall the tyranny they faced under the gold control regime.
When the CBEC issues a clarification, it is expected that things would become simpler and less complicated, which really is not the case always. The field officers are capable of thwarting the noble intentions of the Board. But what do you do when the Board itself confuses?
On 18th March, the CBEC issued a Press Release clarified several issues relating to the Gold Excise. One of the clarifications was:
d) A jewellery manufacturer having turnover less than Rs. 12 crore during the preceding financial year and less than Rs. 6 crore in the current financial year is not required to take registration and file return.
Now what is the 'current financial year'? Generally, we understand it as 2015-16 ending on 31 st March 2016.
Now, as per the Board clarification, a jewellery manufacturer having turnover of more than Rs. 6 crore in 2015-16, is required to get registered. This has sent shock waves down the gold shops. This duty was imposed with effect from 1 st March 2016 and immediately the shutters were downed in most of the shops and many of them are yet to open. Some of them plan to open today, but are jittery as they will have to get registered as per the Board's clarification as their turnover for 2015-16 till February 2016 was more than Rs. 6 crore. I tried to convince many gold merchants that the turnover from April 2015 to February 2016 is irrelevant and for registration this year only the clearances of March 2016 are relevant. But not many were convinced as the mighty Board clarified otherwise.
I told them they were exempted from registration if:
1. Their turnover in 2014-15 was less than Rs. 12 Crore, and
2. Their turnover in 2015-16, during March 2016 was less than Rs. 50 lakh, even if the turnover from April 2015 to February 2016 was more than Rs. 6 crore.
But they were scared that the Department will go by the Board clarification and ask them to get registered if the turnover for the current year (2015-16) was more than Rs. 6 crore.
I asked a senior officer of the Central Excise Department as to what the current year was. He told me, "reading holistically, it should be taken as 2016-17." How can the current year be 2016-17 when we are still in March 2016? What do you call the year 2015-16? The learned senior officer had no answer.