This article on Jewellery Store Licensing & Registration is written by Subin from NUALS, Kochi.
The Gems and Jewellery sector plays a critical part in the Indian economy, contributing around 6-7% of the nation’s GDP. Being one of the quickest developing segments, it is greatly trade driven and labour intensive.
In light of its potential for development and prospective expansion, the Government of India has proclaimed the Gems and Jewellery segment as an integral part of the export sector. The Government has as of late attempted different measures to elevate investments and to upgrade innovation and aptitudes to promote ‘Brand India’ in the global market.
India is widely acknowledged to be the center point of the worldwide gems showcase on account of its low expenses and accessibility of highly skilled artistic work. India is the world’s biggest cutting and polishing place for precious stones, with the cutting and polishing industry being very much supported by government arrangements. Besides, India sends out 95% of the world’s precious stones, according to statistics from the Gems and Jewellery Export advancement Council (GJEPC). The business has created $38.6 billion of income in 2015-16, making it the second biggest exporter after petrochemicals.
India’s Gems and Jewellery division has been contributing largely to the nation’s foreign exchange earnings (FEEs).
Jewellery Shops And Establishment License
Each of these business structures have their own form of registration requirements, but an aspect that remains common to all three forms is the Shops and Establishment License which is given by the inspector of that area. All businesses are required to be registered under the Shops and Establishments Act with the inspectorate of that area. This must be done within a month’s time of setting up the business, subsequent to which a statement is to be issued to inspector.
This statement that you send to the inspector will contain-
- Name of the employer,
- The name and address of the business including the Postal Address,
- Category of business,
- Number of employees employed,
- Date on which the establishment commenced business.
Documents For Registration Under The Shops and Establishments Act are:
- Commercial Address Proof,
- Identity Proof,
- Pan Card,
- Fee payment Challan.
The processing fee for this license is usually between 125 rupees to 12,500 rupees, depending upon the number of employees and manpower you are employing for the business. A jewellery store license shall be issued immediately if all the details in the application are accepted.
Registration of Jewellery Store (Or Venture) In Retail
For physical shop, you need to get your business registered under the Shop and Establishment Act.
If your per year turnover crossed 5,00,000 rupees then VAT or CST (between the states) registration must be done with your local sales tax office. From 1st April, you will need a GST registration if your turnover is over INR 20,00,000 per year.
Sale tax number is required for those who are selling retail jewellery. It can be obtained by contacting your department of revenue sales tax division. This number also permits jewellery store(s) or venture(s) to buy jewellery at wholesale prices without paying sales taxes.
Once VAT registration is obtained, monthly or quarterly VAT returns as applicable must be filed by the business on time to avoid penalties.
Opening A Current Account and Tax Registration
To organise your financial records separately you need to open a separate bank account for your jewellery store (or venture). This helps in getting cash credit or loans from bank or financial institutions.
Before getting your sales tax registration, you must have to open a bank account with any private or PSU banks, as bank statement of your venture is a mandatory document to get registered with sales tax department.
You can start a retail jewellery store as a proprietor or partnership firm or private limited company or LLP. Business structure depends on the size of your business. You can also start as a proprietor or partnership firm and then convert it to private limited at a later point of time once business turnover shows improvement.
- A service tax registration number and a VAT/CST number along with a letter from a CA stating the nature of your business, letterhead having the firm’s name and address, stamp in the name of the proprietor.
- After you submit all these documentation and registration copies to the bank, you can obtain a current account for your business. You are required to have a minimum bale ranging from five to twenty five thousand in this account.
Permanent Account Number or PAN
If you have started as a proprietor then there’s no need to apply for a separate PAN card in the name of your business. But, if your jewellery store (or venture) is of nature other than proprietorship business then, you require a separate PAN card in the name of the business.
For example, if you have started a private limited company or partnership business in the name of Silver Palace private limited or Silver Palace respectively then in both the cases, you need to get your tax registration number or PAN from tax department.
BIS License For Selling Hallmark Jewellery
A jeweller who’s desirous to sell Hallmarked gold jewellery/artifacts is required to obtain a licence from BIS for any particular premises of a jewellery store (or venture) . The licence is granted to a jeweller for a particular premises if the application in prescribed format along with necessary documents is found in order and payment of requisite fees and signing of an agreement for operating the licence by the jeweller jointly with BIS. In case the jeweller is also desirous to sell Hallmarked silver jewellery/artifacts another licence shall be obtained from BIS by submitting a separate application and agreement.
After grant of licence, the jeweller has to follow the terms and conditions mentioned in the agreement. Deviations in purity of precious metal (gold/silver) and observance of operations not in conformance to stated requirements may result in cancellation of the licence. Proceedings for penalties may also be initiated by BIS.
Corporate Licence For Jewellery Store
Under the BIS Hallmarking Scheme for Gold and Silver, jewellers are required to take licence for sale of Hallmarked article from each jewellery store (or venture) . A jeweller under same management having more than one jewellery stores can obtain a corporate licence covering all of its sales outlets. Certain terms and conditions shall be applicable. There is also a provision for providing discount towards corporate licence fees.
List Of Documents To Be Enclosed With The Application
1) Self certified copy establishing the Firm:
- Registration with State Government Authority/ Trade Licence Or
- Certificate of Registration issued by Company Registrar Or
- Registered Partnership Deed in case the applicant is a Partnership Firm Or
- Certificate from a Chartered Accountant if applicant is a Proprietorship firm.
2) Self-certified copy authenticating the Firm’s premises (not older than 3 months) :
- Registration with State Government Authority/ Trade Licences OR
- Sales Tax/ VAT registration OR
- Income Tax Assessment Order OR
- Insurance Policy OR
- Property tax receipt OR
- Rent agreement with last rent receipt OR Sale/ Lease Deed agreement.
3) Documents as identity proof of signatory on the Application :
- Aadhar Card
- Driving Licence
- PAN card
- Voter Identity card
- Photo Bank ATM card
- Photo Credit card
- CGHS/ECHS photocard
4) The additional documentation required to be submitted with the application are as follows:
- Agreement on non-judicial stamp paper of Rs 100/- in the prescribed format.
- Location map of premises from some nearest prominent landmark (illustrative only).
This’s all about Licensing and Registration of Jewellery Store(s) for now. Did you find this post useful? Let us know in the comments section below. Don’t forget to Share!