The Hindu : Business : What is branded jewellery

Online edition of India's National Newspaper
Saturday, Mar 05, 2005

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Business

What is branded jewellery — Government clarifies

By Our Special Correspondent

NEW DELHI, MARCH 4. In a bid to clear the misgivings among a section of the jewellery trade, the Government today noted that the 2 per cent excise duty proposed on "branded'' articles of jewellery is leviable only if the brand name or the trade name, as defined, is indelibly affixed or embossed on the article of jewellery itself. Besides, it does not include "hallmarked'' jewellery for the purpose of the levy.

According to a Finance Ministry statement here, the duty, as proposed in the budget for 2005-06, is to be levied on jewellery only if the items are manufactured, marketed and sold under brand names. Explaining further to ensure complete transparency in the enforcement of the new levy, the statement said that generally, a jeweller gets the jewellery made by goldsmiths and job-workers who put a mark or a sign or initials on the article of jewellery.

This marking is only to identify that the jewellery was received from a particular goldsmith. Such jewellery cannot be considered as branded jewellery and, therefore, no tax is leviable on such products.

Also, there are such cases that when a jeweller sells jewellery to customers, he puts a distinctive sign or a mark or initials on the item only for the purpose of identification. This is to ensure that when the jewellery is returned to him, he can recognise the item as his own. Here also, there is no sale of jewellery under a brand name and such jewellery will not attract tax.

However, when "a jeweller advertises and sells 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 will be regarded as "branded jewellery and will be liable to the tax,'' the statement clarified.

As regards "hallmarked'' gold jewellery, the Ministry said that "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 purpose of the excise levy.

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