service tax
This query is : Resolved
25 June 2016
is service tax applicable on gold ornaments making.?
26 June 2016
No service tax applicable but excise duty applicable.
26 June 2016
ok.. sir thank you
27 June 2016
No only VAT is applicable
27 June 2016
yes i think exice duty is charge on sales of ornaments
27 June 2016
Excise duty is applicable on making and selling of gold ornaments.
27 June 2016
ok. then 1% exice duty is applicable over 6 cr turnover am I correct?
24 July 2025
Yes, your understanding is mostly correct, but let me clarify it precisely as per the pre-GST (Service Tax & Excise) regime in place until 30 June 2017:
✅ 1. Service Tax on Gold Ornament Making:
No Service Tax was applicable on making charges of gold ornaments if done by a jeweller through a job worker/artisan.
However, if the making charges were charged separately and not part of the sale price, in some cases they were liable under service tax, especially if provided by an organized service provider and not an individual artisan.
That said, for most traditional jewellers, the making was part of the sale—hence, not taxable under service tax, but rather under VAT/Excise.
✅ 2. Excise Duty on Gold Ornaments (Post Budget 2016):
From March 1, 2016, Excise Duty @ 1% (without CENVAT credit) or 12.5% (with credit) became applicable on manufacture of gold jewellery, subject to exemptions.
⚠️ Applicability conditions:
Excise duty was applicable only if turnover exceeded ₹6 crore in the preceding financial year.
Small-scale exemption was available for turnover up to ₹6 crore, and duty became applicable on turnover exceeding ₹6 crore in the current year.
Manufacturers were required to register under Central Excise if they crossed this limit.
✅ 3. VAT Applicability:
VAT was also applicable on the sale of gold ornaments at the applicable state rates (usually 1% to 2%).
📌 Summary:
Tax Type Applicability (Pre-GST)
Service Tax Not applicable on traditional making charges (in most cases)
Excise Duty Applicable @1% if turnover > ₹6 crore
VAT Applicable on sale of gold ornaments
✅ 1. Service Tax on Gold Ornament Making:
No Service Tax was applicable on making charges of gold ornaments if done by a jeweller through a job worker/artisan.
However, if the making charges were charged separately and not part of the sale price, in some cases they were liable under service tax, especially if provided by an organized service provider and not an individual artisan.
That said, for most traditional jewellers, the making was part of the sale—hence, not taxable under service tax, but rather under VAT/Excise.
✅ 2. Excise Duty on Gold Ornaments (Post Budget 2016):
From March 1, 2016, Excise Duty @ 1% (without CENVAT credit) or 12.5% (with credit) became applicable on manufacture of gold jewellery, subject to exemptions.
⚠️ Applicability conditions:
Excise duty was applicable only if turnover exceeded ₹6 crore in the preceding financial year.
Small-scale exemption was available for turnover up to ₹6 crore, and duty became applicable on turnover exceeding ₹6 crore in the current year.
Manufacturers were required to register under Central Excise if they crossed this limit.
✅ 3. VAT Applicability:
VAT was also applicable on the sale of gold ornaments at the applicable state rates (usually 1% to 2%).
📌 Summary:
Tax Type Applicability (Pre-GST)
Service Tax Not applicable on traditional making charges (in most cases)
Excise Duty Applicable @1% if turnover > ₹6 crore
VAT Applicable on sale of gold ornaments
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