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What is excise duty all about?

August 26, 2009 13:49 IST

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In the Indian tax structure, there are a lot of taxes that

people pay for different reasons. Income tax, sales tax,
entertainment tax, value added tax etc. All these taxes
are existent because in some way or the other it impacts
and helps the economy. One such tax that is prevalent in
any manufacturing sector is the excise duty.

What is excise duty?

An excise or excise tax (sometimes called an excise

duty) is a type of tax charged on goods produced within
the country (as opposed to customs duties, charged on
goods from outside the country). It is a tax on the
production or sale of a good. This tax is now known as
the Central Value Added Tax (CENVAT).

Though the collection of tax is to augment as much revenue as possible to the government to provide public services, over
the years it has been used as an instrument of fiscal policy to stimulate economic growth. Thus it is one of the socio-
economic objectives.

What are the types of excise duty?

MOST MOST MOST
There are three different types of central excise duties which exist in India [ Images ] which are as follows: RECENT EMAILED COMMENTED
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Basic - Excise Duty, imposed under section 3 of the 'Central Excises and Salt Act' of 1944 on all excisable goods other than rejected
salt produced or manufactured in India, at the rates set forth in the schedule to the Central Excise tariff Act, 1985, falls under Respect DMK for supporting Lankan Tamils:
the category of basic excise duty in India. Chidambaram
Houseboat murder: Dutch accused remanded to
Additional - Section 3 of the 'Additional Duties of Excise Act' of 1957 permits the charge and collection of excise duty in custody
respect of the goods as listed in the schedule of this act. This tax is shared between the central and state governments and Terror's favourite target braces for the next strike
charged instead of sales tax. Short life of LeT terrorists: They join at 16, die at 21!

Special - According to Section 37 of the Finance Act, 1978, Special Excise Duty is levied on all excisable goods that come Moneywiz Live!
under taxation, in line with the Basic Excise Duty under the Central Excises and Salt Act of 1944. Therefore, each year the
Finance Act spells out that whether the Special Excise Duty shall or shall not be charged, and eventually collected during BSE 18,458.10 +7.87 9:00 12:45
the relevant financial year.
NSE 5,553.60 +0.35 9:00 12:45
Which goods are excisable goods?
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The term 'excisable goods' means the goods which are specified in the first schedule and the second schedule to the
Central Excise Tariff Act, 1985, as being subject to a duty of excise and includes salt. Top Gainer - RelianceCommu.Ltd +5.71 - View All
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Who is liable to pay excise duty?

The liability to pay tax excise duty is always on the manufacturer or producer of goods. There are three types of parties who
can be considered as manufacturers:

Those who personally manufacture the goods in question

Those who get the goods manufactured by employing hired labour
Those who get the goods manufactured by other parties

Is it mandatory to pay duty on all goods manufactured?

Yes, it is mandatory to pay duty on all goods manufactured, unless exempted. For example, duty is not payable on the
goods exported out of India. Similarly exemption from payment of duty is available, based on conditions such as kind of raw
materials used, value of turnover (clearances) in a financial year, type of process employed etc.

What is the consequence of evading payment of excise duty?

Under the different sections of the central excise act, the fines for evading tax can range from twenty-five to fifty per cent of
the amount of duty evaded. When you look at the amount of excise you may have to pay, this is a rather large amount and
along with the financial repercussions, you also have to encounter a tarnished image.

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Total 9 messages Pages | 1

taxes on export ...

by bijay pradhan (View MyPage) on Dec 11, 2012 04:44 PM

i AM A MANUFACTURER TRADING THE MATERIALS TO CHINA,WHAT TAXES IS TO PAY AT INDIA TO ME.

WHAT TYPE TAXES WILL PAY AT CHINA BY THE BUYER.

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calculation of ed
by vijay kumar mohere (View MyPage) on Jun 06, 2012 08:54 AM

good information , but how governament will calculate ED when plant is some where and ED office is some
where?

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Knowledge
by pepitup (View MyPage) on Feb 20, 2012 04:54 PM | Hide replies

Sir the limit of Exices Exemption is 1.5 cr for manufacturing and trading is totaly exempted . so ijust want to know
that one firm who is manufacturing as well trading for the raw material which the firm use for manufacturing. if the
yearly manufacturing is around 1.3 Cr as well as trading is 1 cr for the same firm does the firm come under
Excise

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Re: Knowledge
by pawan kumar (View MyPage) on Sep 11, 2012 02:12 PM
No

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excise duty
by lokesh (View MyPage) on Sep 30, 2011 03:38 PM

if shipment clear in dbk can we take rebate claim of excise duty

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excise duty
by shivram ganesan (View MyPage) on Aug 26, 2009 03:10 PM | Hide replies

god piece of information. there is state excise duty on certain products where central excise duty is not
appliocable. pls highlight the details

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Re: excise duty

by sanish kumar (View MyPage) on Aug 26, 2009 03:38 PM
The authority to collect Central Excise Duty (CENVAT) derives from entry 84 of the Union List
business.rediff.com/report/2009/aug/26/perfin-what-is-excise-duty-all-about.htm 2/3
4/8/13 What is excise duty all about? - Rediff.com Business
The authority to collect Central Excise Duty (CENVAT) derives from entry 84 of the Union List
(List I), Seventh Schedule read with Article 246 of the Constitution of India. The constitution
assigns the power to collect excise duties on potable alcohol, alcoholic preparations and
narcotic substances to the states.

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Appreciation
by aunanda kumar (View MyPage) on Aug 26, 2009 02:52 PM

Good Informative for the layman to know and for

the learned also to know.

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Total 9 messages Pages: | 1

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