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How to Start a Jewellery Business in India

How to Start a Jewellery Business in India
By Ayush Gulgulia (Jain)

In other parts of world jewellery business might not be the most profitable venture to associate with but in a country like India where on almost every occasion jewellery becomes a ritual and even most preferred source of investment, Thus this industry has always been most lucrative and growing segment in Indian economy.



Now let’s look, how to start up with jewellery business in India.




  1. Unique Name

First step towards setting up the jewellery business is choosing a Unique/Non-identical name, i.e the name which is not already take or being registered by someone else. Also make sure chosen name should be in correlation with the Line/Segment of products you will be going to offer and which is also suitable when your business expand its folds.
For Example: You choose name “Gold hut” but you also offer Diamond, Silver & other precious stones made jewellery.
In that case chosen name is misleading and should be avoided, simply because it shows Rigidness of what business offers.

  1. Bank Account

  • A separate bank account has to be opened with either a private or public bank as per your convenience in name of jewellery business.
  • Bank statements are required for various statutory registrations required to setup jewellery business and are mandatory in few cases.
  • Loan or any cash credits will only be sanctioned once there is a bank account in name of business.

  1. Registration- Retail jewellery business

  • Now you need a physical counter to offer, for that the shop or business place have to be registered under the Shop and Establishment Act.
  • Secondly, the business has to take a Registration under VAT & CST (Inter-state sale) from Local sales tax office.
  • Permanent Account Number (PAN): If you have started as a proprietor then there is no need to apply for a separate PAN card in name of business but if nature of ownership is other than proprietorship then in that case a separate PAN has to be applied in name of jewellery business.  
  • TAN – Tax collection or deduction account number is required when the retailer is selling bigger (Individual item amount) piece of jewellery whose value is above the statutory limit, i.e Rs.5, 00,000 /- or turnover is above statutory limit.

  1. Type of Ownership

  • Form of ownership in Retail Jewellery business can be :
    • Proprietorship Firm
    • Partnership Firm
    • LLP
    • Private Limited Company
  • Each of above has its own pros and cons, that’s mainly should depend on Size of business you are going start with or in future you propose to expand your business, Feasibility and Tax applicability in each type etc.
  • Initially if the Retail business have to start at low scale Proprietorship or Partnership form of business is more preferred as they are easy to establish and have lesser legal formalities as compared to Private Limited Company and LLP.
  • In future when business expands, Ownership can be later transferred / Converted to Private company of LLP form of business.

  1. Licenses

  • BIS license for selling Hallmark Jewellery – Now days where the customer is so conscious about quality of jewellery, It is preferred to sale Hall marked Jewellery as it gives a customer reasonable assurance about the purity and quality of jewellery they are purchasing.
So retailer should obtain a license from Bureau of Indian Standards (BIS) for the particular retail outlet.   



      

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