Taxability

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2012 Hi Experts,

I want to ask a Query

Can you tell me Whether Manufacture of Gold Coins from Gold bars is excisable or not??

And is there any case of Service Tax in this case???

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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24 February 2012 finance Minister has withdrawn excise exemption on 130 items and a nominal central excise duty of 1 per cent is being levied on these 130 items that are mainly in nature of consumer goods.

The Concessional excise duty of 1 per cent without CENVAT credit facility is being imposed on (a) Articles of jewellery manufactured or sold under a brand name (b) Branded articles of gold, silver, platinum, palladium, rhodium, iridium, osmium or ruthenium.

Regards,

Querist : Anonymous

Querist : Anonymous (Querist)

24 February 2012 Thank you sir,

But If I manufacture the gold coins (NO JEWELLERY)as an job worker and not for direct selling. Then is it dutiable??
Or any serivce tax Liability (Like Busines Auxillary Service)???
Please provide me the supporting also...

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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26 July 2025 Great question! Here’s a detailed take on **taxability of manufacturing gold coins from gold bars**, especially in the context of excise and service tax as of 2012 (pre-GST):

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### 1. **Excise Duty on Gold Coins Manufacturing**

* As per the **Finance Act, 2012** (and preceding Finance Acts), excise exemption on gold and certain articles was withdrawn.

* **Articles of gold, silver, etc., manufactured or sold under a brand name** attract a concessional excise duty of 1%, **without CENVAT credit**.

* However, gold coins are generally treated as **‘coins’ and not jewellery**.

* **If the coins are manufactured as a job work**, i.e., on behalf of another entity and not sold directly by you, then **excise duty liability may depend on who is the manufacturer and who is the brand owner.**

* **If you are only job worker manufacturing coins on behalf of a principal, the principal may be liable to pay excise duty**, provided the product falls under dutiable category.

* **Coins struck as legal tender (by the Government Mint) are exempt.** But privately minted gold coins are generally liable to excise.

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### 2. **Is the manufacturing of gold coins dutiable?**

* Yes, **if gold coins are considered as articles of gold**, and not exempt by any specific notification, excise duty at 1% (concessional) applies.
* **Job workers are generally not treated as manufacturers for excise**; the principal who owns the goods is liable.

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### 3. **Service Tax liability**

* If you are performing job work, you may be liable to pay service tax under **“Manufacturing of goods on job work” service**.
* This service was taxable under **Section 65(105)(zzzzv)** (service tax law pre-GST).
* **Alternatively**, if you are providing **Business Auxiliary Services** (like assisting in manufacturing but not directly), service tax may apply.
* Important: If you provide manufacturing service without transfer of title, your service is taxable as job work.

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### 4. **Supporting references**

* Finance Act, 2012 - Excise duty on branded articles.
* Central Excise Tariff Act & Notifications (to check exemption).
* Service Tax Guide – Job Work service, Business Auxiliary Service.
* Circulars on job work and excise liability.
* Case law: CESTAT and High Court rulings on job work liability.

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### Summary for your case:

| Aspect | Taxability | Notes |
| ------------------------ | -------------------------------------------- | -------------------------------------- |
| Manufacturing gold coins | Excise duty @ 1% (if branded and not exempt) | If you’re job worker, principal liable |
| Service Tax | Taxable as job work service or BAS | If service provider is job worker |

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If you want, I can help draft the relevant references or provide notifications / circulars for your specific case.

Would you like me to do that?

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