Content

Foreword 2

Jewellery business 3

VAT Registration of Jewellers 3

Exemption under the VAT Act 4

Keeping of records 4

VAT invoice 5

Submission ofVAT returns 5

Exports of jewellery 5

Credit for input tax 5

Calculation of value of taxable supplies 6

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 FOREWORD
This leaflet is intended to assist jewellers
who, in the course of their trade or
business, manufacture and/or supply
precious, semi-precious stones and
jewellery. It is for information only.

For the legal provisions, you may

consult the Value Added Tax Act and
the regulations made under that Act,
including the provisions relating to
Deferred Duty and Tax Scheme and VAT
Free Supplies to Visitors, the Jewellery
Act and the regulations made under that
Act, including the Jewellery (Dealer’s
Registration and Transaction) Regulations
2012, particularly relating to second-
hand jewellery and trade-in jewellery.

This leaflet is for information only.

Taxpayer Education & Communication

Department
Mauritius Revenue Authority,
Ehram Court,
Cnr Mgr. Gonin & Sir V. Naz Streets,
Port Louis.

T: 207 6000 I F: 207 6033

E: taxpayerservices@mra.mu
W: www.mra.mu
Twitter: @MRA_Services

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Jewelry Business
The jewellery business is regulated by the Jewellery Act and the Jewellery
Regulations. The Jewellery Act and the Jewellery Regulations 2012 provide
that a person who deals in jewellery, semi-precious or precious stones is
called a dealer. A dealer includes a person who:

a. Manufactures, sells and imports jewellery;

b. Purchases second-hand jewellery or trades-in jewellery;
c. Exports jewellery and melted precious metals;
d. Supplies jewellery for sales; and
e. Imports, sells, processes precious or semi-precious stones.

The Assay Office is responsible for the assaying and marking of jewellery as
well as verification and grading of precious and semi-precious stones and
registration of a dealer. It also regulates and controls dealers who purchase
second-hand jewellery and trade-in jewellery

VAT Registration of Jewellers

In accordance with Item 25 of Part I of the Tenth Schedule to the VAT Act, a
dealer registered with the Assay office under the Jewellery Act is required
to apply for compulsory registration forVAT, irrespective of his turnover of
taxable supplies.

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 Exemption under the VAT Act
By virtue of Items 52 and 57 of the First Schedule to the VAT Act, the following
items are exempt from VAT:
• Gold compounds of H.S Code 2843.30.00
• Gold, unwrought or in semi-manufactured forms, or in powder form or
waste and scrap of heading 71.08
• Chains and similar articles produced in continuous length exceeding 200
centimeters, clasps and parts of silver suitable for use in the manufacture of
jewellery of H.S Code 7113.11.10
• Chains and similar articles produced in continuous length exceeding 200
centimetres, clasps and parts of other precious metal suitable for use in the
manufacture of jewellery of heading 7113.19.10
• Pearls, diamond, stones, silver and platinum including waste and scrap
of headings 7I.0I, 7I.02, 7I.03, 7I.05, 7I.06, 7I.I0 and 7I.I2 and of H.S Codes
7104.20.00 and 7104.90.00
• Minted gold bars imported, purchased or offered for sale by the Bank of
Mauritius.

Keeping of records
Notwithstanding the records required to be kept under the Jewellery Act,
a dealer also has the obligation to keep records for a period of at least five
years in accordance with the VAT Act.

The dealer has to:

• keep, in the course of his business, a full and true written record, whether
electronically or otherwise, in English or French language, of every
transaction he makes.
• keep a copy of the Customs Declaration either electronically through the
TradeNet or otherwise, in chronological order, in respect of import and
export.
• keep the receipts and VAT invoices, separately, in chronological order in
respect of goods and services supplied to him.
• issue VAT invoices and keep legible copies thereof, either electronically or
otherwise, in chronological order in respect of goods and services supplied
by him.

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VAT invoice
Every dealer, being a VAT registered person, has the obligation to issue a VAT
invoice to any person to whom he makes a supply.The VAT invoice should
specify the following:
a. the words “VAT invoice” in a prominent place;
b. his name, business address,VAT Registration Number and business
registration number;
c. its serial number and date of issue;
d. the quantity and description of the goods or the description of the services;
e. the value of the supply, indicating whether the value is inclusive or
exclusive of VAT;
f. where the value of the supply is subject to VAT:
i. the value of supply,
ii. the amount of VAT chargeable and the rate applied; and
g. in case the purchaser is a VAT registered person, the name, business
address, business registration number and the VAT Registration Number
of the purchaser.

Submission of returns
Where the annual turnover of taxable supplies of the dealer does not exceed
10 million rupees, he is required to submit quarterly returns and pay the
amount of VAT, if any, accordingly. Otherwise he must submit monthly returns.

The dealer shall submit returns electronically.

Exports of jewellery
Where a dealer exports jewellery, the exported jewellery are treated as zero
rated. Zero-rated supplies are taxable supplies but the rate at which VAT is
charged is zero

Credit for input tax

A dealer making taxable supplies, including zero-rated supplies, is eligible to
claim credit for input tax subject to the limitations of Section 21 of the VAT Act.

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 Calculation of Value of taxable supplies
The Value Added Tax Act provides as follows:

• Value of any taxable supply made by a taxable person shall be determined

in accordance with the provisions of the Act, and shall be expressed in
Mauritian currency.
• Where a supply is for a consideration not consisting or not wholly consisting
of money, the value of the supply shall be taken to be the open market
value of the supply.
With a view to assisting jewellers to calculate the correct value of their taxable
supplies, some scenarios and worked examples are provided hereunder for
their guidance.

Scenario I
A customer calls at the business premises of a dealer and purchases a new
jewellery for the sum of Rs 19,500, before VAT.

Selling price of jewellery (vat excl) Rs 19,500

VAT thereon 15% Rs 2,925
Amount Payable Rs 22,425

Scenario 2
A customer brings a gold bar to a dealer for the manufacture of a necklace
The agreed price in accordance with the Jewellery Regulations 2012 of the
bar gold is Rs 17,500. The selling price of the necklace is Rs 30,000, VAT
exclusive. By virtue of the VAT Act, the jeweller has supplied goods, the sale
value of which is Rs 30,000. VAT has to be charged as follows:

Selling price of necklace (VAT excl) Rs 30,000

VAT thereon (15%) Rs 4,500
Rs 34,500
Less Agreed price of bar gold Rs 17,500
Balance payable Rs 17,000

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Scenario 3
A customer brings to a dealer a ring of an agreed price in accordance with the
Jewellery Regulations 2012 of Rs 15,000 to be enlarged. The dealer charges
Rs 2,000 for the work, inclusive of the charge for the additional gold.

In this case, the jeweller is considered to have provided a service and VAT is
leviable on the amount charged by the jeweller.

VAT is chargeable as follows:

Value of supply Rs 2,000

VAT thereon @15% Rs 300
Amount Payable Rs 2,300

Scenario 4
A customer deposits with a dealer a piece of diamond at an agreed price in
accordance with the Jewellery Regulations 2012 of Rs 200,000 to be placed
on a ring provided by the dealer for an agreed price of Rs 15,000, before VAT.
The customer is charged Rs 3,000 for the placement of the diamond on the
ring.

In this case, the diamond brought in by the customer has not undergone
any physical change and the jeweller is considered to have sold a ring and
provided services for the placement of the ring.

The amount payable by the customer will be as follows:

Selling price of ring (VAT excl) Rs 15,000

Charge for the placement of diamond Rs 3,000
Value of Supply Rs 18,000
VAT thereon @ 15% Rs 2,700
Amount Payable Rs 20,700

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 Scenario 5
Gold is supplied by Dealer A to Dealer B for the manufacture of jewellery.

Dealer B has to charge VAT on the jewellery supplied to Dealer A who is

entitled to take credit for input tax in respect of the VAT charged by Dealer B.

When Dealer A supplies the jewellery to his clients, he has to charge VAT
thereon.

Scenario 6
A client brings in old jewellery to a dealer for the manufacture and supply of
new jewellery .The different scenarios where all jewellery is traded in and the
VAT treatment in respect of each scenario is illustrated bellow:

For the purpose of the scenarios, the value of gold 750 (18 carat) is taken to
be Rs. 1,000 per gram.

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Scenarios VAT Treatment

Weight Value
(gm) (Rs)
3.1 Where the weight New Jewellery 30 40,000
of the jewellery
deposited (traded Old Jewellery 10 10,000
in) is less than the
weight of the new Value on which VAT is
30,000
jewellery. chargeable

VAT at 15% 4,500

Amount payable by client 34,500

3.2 Where the weight of New Jewellery 30 40,000
the old jewellery is
equal to the weight Old Jewellery 30 30,000
of the new jewellery.
Value on which VAT is
10,000
chargeable

VAT at 15% 1,500

Amount payable by client 11,500

3.3* Where the weight New Jewellery 30 40,000
of the old jewellery
Old Jewellery 40
is higher than the
weight of the new Old Jewellery used 30 30,000
jewellery. Value on which

* Note: Irrespective of
VAT is chargeable 10,000
whether the 10 grm VAT at 15% *1,500
remaining has been
purchased by the dealer
or has been returned to
the client, the VAT payable
remains Rs 1,500.

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 Ehram Court, Cnr Mgr. Gonin & Sir Virgil Naz Streets, Port Louis, Mauritius
T: +230 207 6000 | F: +230 211 8099 | E: headoffice@mra.mu | W: www.mra.mu