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Published on:

September 18, 2024

Viraaj Vashishth

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Artificial/Imitation Jewellery HSN Code & GST Rate - 7117

Artificial or imitation jewellery is popularly used as a convenient and graceful substitute for real jewellery. The combination of its various styles and low cost makes it popular amongst consumers. However, it is also important for businesses engaged in manufacturing and supply of such jewellery, to ascertain the appropriate Harmonized System of Nomenclature (HSN) code and Goods and Services Tax (GST) rate for effective compliance and tax administration purposes. Here we will examine the implications of the artificial Jewellery HSN code 7117 on artificial and imitation jewellery and its related GST rates. Being able to give such classifications and comply with the regulations needs to be effective for the proper running of business and the payment of taxes.

Harmonized System of Nomenclature (HSN) Code

HSN is an internationally adopted system of product classification designed to report trade-in goods. It helps in the movement of goods in an organized manner, by providing uniform classification of products which helps to enhance customs clearance and generally international trade.

HSN Code 7117

HSN Code 7117 pertains specifically to imitation jewellery, often referred to as artificial jewellery. Imitation is also known as duplication or reproduction, it is commonly used as an affordable substitute for expensive jewellery consisting of precious metals or stones. The items classified under this code include:

1. Imitation Jewellery: It is a type of jewellery that is an imitation of real jewellery but made using cheaper materials.

2. Costume Jewellery: It is another term for imitation, used for jewellery mostly in fashion and casual clothes.

Exclusion and Inclusion

Any aspect of HSN Code 7117 including jewellery classified under this code is not included in gold, silver, and platinum jewellery, nor cosmetic ornaments with real precious stones embedded in them. These items fall under different HSN codes and GST rates.

Need for proper classification

Appropriate classification under HSN Code 7117 is crucial so that the correct GST will be levied. A classification error will lead to regulation breaches and improper declaration of taxes which may attract fines or legal action.

GST Rate for HSN Code 7117

Under the classification of artificial or imitation jewellery HSN code 7117 category, the GST rate of 18% has been in operation. This rate is also usable for both purchasing and selling of imitation jewellery and is a key consideration in business pricing and financial strategies.

HSN Code	Description	Rate (%)	Effective Date	Rate Revision
7117	Imitation Jewellery	3	01/07/2017	3%
71171100	Cuff-Links And Studs	3	01/07/2017	3%
711719	Other	3	01/07/2017	3%
71171910	Bangles	3	01/07/2017	3%
71171920	German Silver Jewellery	3	01/07/2017	3%
71179010	Jewellery Studded With Imitation Pearls Or Imitation Or Synthetic Stones	3	01/07/2017	3%

GST Rate for HSN Code 7117

GST Compliance for Traders

It is necessary for ALL businesses engaged in the imitation jewellery trade to understand and comply with the GST regimen such as: -

1. GST Registration- It is compulsory for businesses that cross the threshold turnover limit.

2 Invoicing and Documentation- a provision for proper invoicing with the GST details is required.

3 Filing GST Returns- there is a requirement for returns to be filed at regular intervals to avoid any compliance issues.

4 Maintaining Records- there must be sufficient documentary evidence to show the transactions and tax payments.

Practical Implications for Businesses

Impact on Pricing and Profit Margins

The 18% GST on HSN Code 7117 is directly related to the prices of imitation jewellery. Businesses will have to incorporate this tax in their pricing strategies if they intend to make profits and not be overtaken by competition. There should be proper pricing and cost control to effectively manage the profit margins.

Record Keeping and Documentation

For businesses to comply with GST regulations, they have to be very careful in undertaking bookkeeping. This comprises keeping invoices, tax payment receipts, and reports of sales and purchases. All these activities assist in easing the process of filing GST and preparing for audits.

Common Challenges and Solutions

Challenges:

1. Misclassification: Classifying the goods under different HSN codes leads to discrepancies in the GST that clients are supposed to pay.

2. Compliance: Business enterprises face difficulties in compliance because of the constant changes in the GST system.

Solutions:

1. Regular Training: Employers should enhance their businesses by building the regular training of the employees about HSN codes and GST.

2. Consultation with Experts: The businesses should bring tax people on board to deal with their compliance as well as address any issues that may arise.

Case Studies and Examples

Contextual Case Studies

Several industries have had problems with the classification of their products under HSN Code 7117. For example, a retailer incorrectly classified an imitation jewellery product of a higher standard with a different code which resulted in less GST and penalties.

Best Practices

1. Variable Audit Schedule: Regular audits may assist in the identification and correction of classification errors.

2. Maintaining Records: Maintain records in line with the changes in GST rates and assimilation of HSN codes.

Conclusion

It is essential for businesses that aim at achieving compliance with the GST rules to comprehend the use of HSN Code 7117 dealing in imitation jewellery. Pricing and tax management about the 18 per cent GST on HSN Code 7117, advises a lot on these issues. Regarding the HSN code classification, businesses should keep track of the amendments made to the GST rates or the classified codes currently in use. It is important to be reactive to the dynamism of the changes so that compliance levels remain within acceptable limits and any arising challenges are avoided.

FAQs

1. What is the artificial jewellery HSN code?

For artificial jewellery, the HSN Code falls directly under 7117.

2. How does imitation jewellery come under HSN codes?

Imitation jewellery comes under the 7117 HSN Code which includes a range of other non-precious jewellery enveloping several attributes.

3. What are the artificial jewellery hsn code and gst rate?

In the case of HSN Code 7117, which comprises accessories of artificial or imitation jewellery, the applicable GST is 18 per cent.

4. Is there any provision for imitation jewellery falling under the 7117 HSN code?

No, imitation jewellery under HSN Code 7117 is chargeable with the standard GST rate of 18 %.

5. How will I know the HSN Code that corresponds with my artificial jewellery products?

For artificial jewellery, HSN Code 7117 should be used for proper classification and GST application.

6. Can I make use of HSN Code 7117 to classify both costume and imitation jewellery?

Yes, both costume and imitation jewellery fall under HSN Code 7117.

7. HSN Code 7117 is used by businesses, what are the GST compliance conditions that have to be met?

Businesses must get registered for GST, can do proper invoicing and accurately file HSN Code 7117 returns for refunds.

8. Is the HSN Code for jewellery the same as the artificial jewellery HSN code?

Yes, different HSN codes apply to different types of jewellery. HSN Code 7117 is particular for artificial / imitation jewellery.

9. How can the taxation alright on HSN Code 7117 affect my pricing strategy?

The 18% GST that is charged on HSN Code 7117 has a bearing on the price and the profit margin, thus it is how sensitivity in your pricing strategy has to be adjusted.

10. What are the potential risks if an individual is classified as artificial jewellery HSN code incorporating a different HSN Code?

Misclassification can result in incorrect GST rates, penalties, and issues with compliance for such goods. Use with caution, 7117 HSN Code is prone to misuse.