Jewellery is worn as a status symbol and also at auspicious occasions like marriage, engagement, and festivals etc.Thus jewellery industry in India is the most booming and growing sector that contributes 6-7% of India’s GDP.India’s domestic gems and jewellery industry was estimated to have a market size of about Rs. 251,000 crores in 2013 with the potential to grow to Rs. 500,000 crores by 2018. The gems and jewellery industry are set to witness a very healthy Growth Rate of about 15.95% making it very attractive industry for those who are seeking financial growth.
Procedure to Start a Jewellery Business
In India we can get into jewellery business by way of Retail Jewellery Shops, Online Jewellery Retail, Gold Trading, Gold Importers and Jewellery Manufacturers etc. But in this article, we will primarily discuss retail jewellery shop. As Retail jewellery shops are very popular in India and research has shown that Indian consumers are less focused on buying branded jewellery.
To start a retail jewellery business in India we need to follow the below-listed steps:
- Business Registration for jewellery business
First step in starting a jewellery retail business is to come up with a brand name for the retail business, get a Trademark for thebusiness, get a website for the Business and Get the business registered as private limited company, partnership, and LLP (Limited Liability Partnership), One can also start your business as a sole proprietorship and partnership firm. The Person should also note that registration and licenses may vary state to state, therefore it is recommended to check with rules and regulation of the respective state.
Jewellery businesses tend to have large turnover (Turnover in excess of Rs.1 crore) easily. Hence, it recommended that jewellery businesses be registered as a private limited company to enjoy the benefits of limited liability protection, easy transferability and more. Further, by incorporating a private limited company for the jewellery business, funds in the form of debt or equity can be easily raised.
Different business structures have their own form of registration requirements, but an aspect that remains common to all 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 need 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 StoreIn Retail
For physical shop, one need to get his business registered under the Shop and Establishment Act.
If his per year turnover crossed 5,00,000 rupees then VAT or CST (between the states) registration must be done with his local sales tax office. From 1st April, he will need a GST registration if his 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 department of revenue sales tax division. This number also permits jewellery store 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 financial records separately we need to open a separate bank account for jewellery store. This helps in getting cash credit or loans from bank or financial institutions.
Before getting sales tax registration, we must have to open a bank account with any private or PSU banks, as bank statement of the venture is a mandatory document to get registered with sales tax department.
One 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 his business. He 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 our business, letterhead having the firm’s name and address, stamp in the name of the proprietor.
- After submitting all these documentation and registration copies to the bank, we can obtain a current account for our business. We are required to have a minimum bale ranging from five to twenty-five thousand in this account.
- Permanent Account Number or PAN
If a person has started as a proprietor, then there’s no need to apply for a separate PAN card in the name of his business. But, if his jewellery store is of nature other than proprietorship business then, he is requiring a separate PAN card in the name of the business.
For example, if a person has 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, he need to get his tax registration number or PAN from tax department.
Below are the Steps to acquire a PAN Card in the Name of the Business.
- Step 1: Fill in the application form on the NSDL website. Select Form 49A from the drop-down menu.
- Step 2:Select ‘Firm’ from the ‘Application Type’ and fill in details such as company name, date of incorporation etc.
- Step 3: Fill in the company registration number and income details, as well as the communication address.
- Step 4: Fill in the Assessing Officer (AO) Code
- Step 5: Upload copies of the required documentation and pay the requisite fee.
- Step 6: You will receive an acknowledgment number, which can be used to track the status of your PAN application.
- Step 7: Send the signed acknowledgement form within 15 days of filling in the online application to the NSDL office mentioned below:
Income Tax PAN Services Unit,
NSDL e-Governance Infrastructure Limited,
5th Floor, Mantri Sterling,
Plot No.341, Survey No.997,8,
Model Colony, Near Deep Bungalow Chowk.
Documents Requires for PAN Card for Indian Company
Indian companies applying for a PAN card have to submit the following documents along with the application form:
- Proof of identity/proof of address:
- Copy of Certificate of Incorporation
- Copy of No Objection Certificate issued by Ministry of Corporate Affairs.
- BIS License for Selling Hallmark Jewellery
A jeweller who’s desirous to sell Hallmarked gold jewellery/artefacts is required to obtain a licence from BIS for any particular premises of a jewellery store. The licence is granted to a jeweller for a particular premise 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/artefacts another licence shall be obtained from BIS by submitting a separate application and agreement.
GRANT OF CERTIFICATE
Any jeweller willing to obtain Certificate of Registration for Selling Hallmarked Jewellery/artefacts shall apply with self-certified copies of documents listed below from (a) to (e) with the online application or submit hard copies to the Branch office of BIS having jurisdiction of the area where the jeweller is located, with the application. Registration is granted to the applicant if the application is found to be complete with all necessary documents and fees enclosed within five working days.
- Proof of establishment of the firm or company (Any one of the documents given below)
- Certificate of Registration issued by Registrar of companies along with a memorandum of articles.
- Registered Partnership Deed in case applicant is a Partnership Firm.
- Certificate from a Chartered Accountant if the applicant is a Proprietorship Firm.
- Proof of address of firm’s premises (Any one of the documents given below)
- Registration with State Government Authority/ Trade Licences
- GST registration certificate.
- Income Tax Assessment Order.
- Latest Property tax receipt.
- Rent agreement with last rent receipt.
- Sale/ Lease Deed agreement.
- Proof of Identity of the signatory
- Aadhar based verification/ e- signature
- Self-certified copy of any one of following documents as identity proof of signatory on the Application: – Aadhar Card – Driving Licence – PAN card – Voter Identity card – Passport – Identity Certificate with photo issued by Gazetted Officer on official letterhead.
- Map indicating location of premises from nearest land mark Location map of premises from some nearest prominent landmark for each outlet, as applicable (illustrative only).
E) Proof in regard to annual turnover
- Self-certified copy of GST returns of previous financial year.
- If the firm is new, an undertaking from the firm with expected turnover and assurance to submit GST return after completion of the current financial year and deposit the difference as per actual turnover
The government has notified new guidelines for BIS Hallmark Licence Fees. The license fee will now be known as Registration fees and it will be based on turnover in place population.
According to new guidelines following the change in BIS hallmark license fees for jeweller’s turnover as below:
Turnover up to Rs. 5 cr – Rs. 7500
Turnover between Rs. 5 cr to Rs. 25 cr – Rs. 15000
Turnover between Rs. 25 cr to Rs. 100 cr – Rs. 40000 and
Turnover Above Rs. 100 cr – Rs. 80000
*This fees is for a period of 5 years.
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
- 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.
- 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.
- 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 photo card
- 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.
- Employee Recruitment for jewellery business
A business owner should recruit professional and right kind of people to achieve success and sustainability in business. A business owner should conduct a proper verification of employees that owner will be keeping in the business. even he can ask help from the HR Consultancy Company in India.
- Marketing of the business for jewellery business
As soon as the Owner commence business operation, it is necessary to start marketing business using both offline and online medium as it will help in promotion and creating demand for his jewellery products. Jewellery shops are generally promoted by newspaper advertisements, TV ads, Hoardings and Theatre advertisements etc., he need to make right choice depending on his budgets so that he can get higher returns.
- Managing the Business for jewellery business
After commencing the business, he must obtain tools like the point of sale and billing software, accounting software, inventory management software and customer relationship management software for managing business smoothly. He must also secure security for the jewellery shop.