Written by Suraksha Prasad                                                                 August 19, 2021

Prominently the Indian jewellery inspires passion unlike any other object of desire. As of January 2021, India’s gold and diamond trade contributed ~7.5% to India’s Gross Domestic Product (GDP) and 14% to India’s total merchandise exports. The gem and jewellery sector is likely to employ ~8.23 million persons by 2022, from ~5 million in 2020. Based on its potential for growth and value addition, Indian jewellery is unique in its design and workmanship. The art of making beautiful ornaments, with delicacy and acumen, has been developed throughout historical times. Jewellery is made for almost all the parts of the body and it is and it is also designed to match with the attire and to make jewellery more attractive, it is topped by diamonds and various types of gems.

Every woman in India loves to wear at least a small piece of gold jewellery either in the form of glittering neckwear ornament, or dangling earrings or exquisitely crafted bangles. Even men wear simple gold ornaments like rings, bracelets and chains. Thus, we can say that everyone has been moved by the beauty of gold jewellery and it has become a part of our culture and tradition.  

The rich history and cultural heritage of gems and jewellery together with an enduring attraction towards gold have contributed to the growth of the jewellery industry. India has well-established capabilities in making hand-made and machine-made jewellery in traditional as well as modern designs. The Indian jewellery retail sector continues to be dominated by unorganized jewellers. There are over 2.5 million jewellery shops in India and most of them are family-run. However, with the  Indian consumers becoming more fashion and quality conscious, retailing in the Indian jewellery sector is emerging stronger with various big companies like Tata, Thangamayil, Kalyan, Malabar Golds, Voylla, Aisshpra and so on opening multiple stores across the country. The average customer now wants designs that are unique and contemporary which have generated a lot of franchise business opportunities in the jewellery segment.

Jewellery Manufacturers:

If you are interested in the jewellery segment, get an idea about how the jewellery industry functions. The risk factor might be less when it comes to the business of a franchise outlet, but it requires foresight to go through all the details. There requires a paramount investigation before starting a  jewellery business in India like Aisshpra Gems and Jewels, they are 3rd Generation Jewellers, established in 1940. For the last 78 years, the Group has been providing exceptional jewellery pieces and unmatched service to their customers.70 years of India and more than 78 years of the Hari Prasad Gopi Krishna Saraf Group, resulted in the formation of its evolved identity AISSHPRA GEMS & JEWELS. The fundamental existence has been revamped to cater to the needs of the newer audience in and around Uttar Pradesh. The jewellery at Aisshpra is largely for the masses with gold, diamonds and gemstones dominating the entire range of inventory. There is also a fair amount of silver jewellery and artefacts and soon Aisshpra is also starting a bit of fashion jewellery in response to the needs of the local consumers. Aisshpra launched its forthright campaign “Parivartan ki aur Hamara Kadam” which educated the local masses that Hallmarking needs to be embraced before it becomes a mandate. The call of 100% Hallmarking = 100% Buyback with an option of 18K Hallmarked Gold Jewellery received appreciation and acceptance by their customers and a big mind-gap was bridged for the industry as a whole. It also positions Aisshpra as a Brand of Trust, Integrity & Ethics and the region's premier jewellery player that talks the language of the industry.

Step by step process as to how to start a jewellery making business

In India we can get into the 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 shops. Retail jewellery shops are in India is very popular 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;

The first step in starting a jewellery retail business is to come up with a brand name for the retail business, get a Trademark for the business, get a website for the Business and Get the business registered as a 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 from state to state, therefore it is recommended to check with rules and regulations of the respective state.

Jewellery businesses tend to have large turnover (Turnover in excess of Rs.1 crore) easily. Hence, it is recommended that jewellery businesses be registered as private limited companies 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 the inspector.

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 license for a jewellery business in India shall be issued immediately if all

the details in the application are accepted.

Registration of

Jewellery store in Retail :

The first step in starting a jewellery retail business is to come up with a brand name for the retail business, get a Trademark for the business, get a website for the Business and Get the business registered as a 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 from state to state, therefore it is recommended to check with rules and regulations of the respective state.

Jewellery businesses tend to have large turnover (Turnover in excess of Rs.1 crore) easily. Hence, it is recommended that jewellery businesses be registered as private limited companies 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 the inspector.

For a physical shop, one needs 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.

A Sales tax number is required for those who are selling retail jewellery. It can be obtained by contacting the Department of Revenue sales tax division. This number also permits jewellery stores 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 stores. This helps in getting cash credit or loans from banks or financial institutions.

Before getting sales tax registration, we must open a bank account with any private or PSU banks, as the bank statement of the venture is a mandatory document to get registered with the sales tax department.

One can start a retail jewellery store as a proprietor or partnership firm or private limited company or LLP. The business structure depends on the size of his business. He can also start as a proprietor or partnership firm and then convert it to a private limited at a later point of time once business turnover shows improvement.

Procedure:

 A service tax registration number and an AT/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

A. 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.

Documents Require 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.

B. 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.

C. GRANT OF CERTIFICATE:

Any jeweller willing to obtain a 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)

1.      Certificate of Registration issued by Registrar of companies along with a

memorandum of articles.

2.      Registered Partnership Deed in case applicant is a Partnership Firm.

3. Certificate from a Chartered Accountant if the applicant is a

D. 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.

E. Proof of Identity of the signatory

·         Aadhar based verification/ e- signature

·         Self-certified copy of any one of the following documents like identity proof

of signatory on the Application: - Aadhar Card -

Driving Licence - PAN card - Voter Identity card - Passport - Identity

A certificate with photo issued by Gazetted Officer on official letterhead.

 Map indicating the location of premises from nearest landmark Location map of premises from some nearest prominent landmark for each outlet, as applicable (illustrative only).

F. Proof in regards to an annual turnover

·   Self-certified copy of GST returns of the previous financial year.

·  If the firm is new, an undertaking from the firm with the expected turnover

and assurance to submit GST return after completion of the current financial

year and deposit the difference as per actual turnover

Registration Fee

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 fee is for a period of 5 years.

After the grant of a licence, the jeweller has to follow the terms and conditions mentioned in the agreement. Deviations in the purity of precious metal (gold/silver) and observance of operations not in conformance to stated

requirements may result in the cancellation of the licence. Proceedings for penalties may also be initiated by BIS.

Marketing of the business for jewellery business

As soon as the Owner commences 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 etcHe needs to make the right choice depending on his budget 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.

Bottom line

Start your jewellery business with a well-thought plan into mind that will help your

business gains profit. I hope this article will be helpful if someone is really

looking forward to starting a jewellery business in India and is keen to understand

what you are getting into. The franchise’s business expertise and brand

strength will provide leverage to your jewellery store to perform much better.