Excise duty • • • • Indirect tax Manufactured or produced goods State excise duty Central excise duty .

• • • .Definition .SUPREME COURT • Supreme Court of India has defined “Excise Duty” as “a tax on the production or manufacture of excisable goods produced or manufactured within the country”.

• Collection of excise duty is practically made at a stage next to the manufacture of goods. but is levied on the manufacture or production of a new commodity • Excise Duty is payable by the manufacturer or producer. not by the Consumer.Nature of Excise Duty • The duty of excise is not directly levied on the goods. • • • .


There must be MARKETABILITY of the goods 5.There must be REMOVAL OF GOODS at the factory or site 8.Under section 3 of the Central Excise Act 1944 the Basic conditions for levy are:   1.There must be GOODS 2.There must be MOVABILITY of the goods 4.The goods must be EXCISABLE 3.There must be TAXABLE EVENT 7.The goods must have been PRODUCED or MANUFACTURED INDIA 6. .

1985 2.CETA.CETA 1986 came into force w. 5. .All the goods cannot be excisable only because they are goods 3.Goods must be specified and listed in the Schedule to the CETA.f.CENTRAL EXCISE TARRIF ACT 1. February 28th . 6. 1986 4.e.

 Features of CETA 1. Technical and legal aspects in relation to goods have been incorporated 2.e. i. . Tariff Item Description of goods Unit Rate of Duty 1. 2. The goods of the same class has been grouped together • The Excise Tariff has been classified using 4 digit system.


Transaction Value determined under Sec 4(3)(d) of Central Excise Act.VALUATION OF EXCISABLE GOODS FOR THE PURPOSE OF CHARGING OF DUTY OF EXCISE As per the CETA 1985. or e. excise duty is payable on following basis 1.Tariff value under Sec 3(2) of Central Excise Act. 1944.Duty based on production capacity also known as Compounded Levy Scheme (Rule 15 )  . d.Duty based on value (ad valorem duty) c. 1944.Specific Duty 2.Retail sale price determined under Sec 4A of Central Excise Act. 1944 8.

• Solution • In the case the goods were manufactured prior to 1-3-2008. since at the time of removal the duty is chargeable at 14% (plus 3% education cess) i.Solved example • The goods manufactured by A & Co. However.42% of Rs. On 1-3-2008 the exemption notification pertaining to the said goods was withdrawn . 28. 840. liable to duty at 14% were exempt from duty on account of an exemption notification.2. the goods will be liable to duty at that rate. 14. The value of the goods so removed is Rs. Hence.e. when exemption notification was in force. • Amount of excise duty= 14. compute the amount of such duty.000= Rs. • • • • . if yes.00.42%.00.000. 2. on 2-3-2008. Discuss whether any duty is chargeable on the goods so removed and.Certain good manufactured prior to 1-3-2008 are removed from factory of A & Co. the goods were excisable at the time of manufacture.

05.189968 Therefore.984 i.Q) Computation of transactional value when sale price includes excise and sale tax The cum-duty price of the product is Rs. 5.100)* 4%= Rs.94. 5. 6. x = Rs.1442 x= Rs. Sales tax @ 4%= (5.94. Find out the assessable value and excise duty and sales tax? Solution Let the assessable value of the goods be Rs.e. x = Rs.5.00.984 / 1.984/-. 72.100.94. tax @4% of Rs.189968(x) = Rs.884  • .e. 5.000+72.1442(x) = Rs. 5. 22. 0. 1.045768 (x) • Total price inclusive of excise duty and sales tax = Rs. x + 0. 1.00. Excise duty @14.000 Hence.696 i. It includes sales tax @4% and excise duty @14%(plus 3% education cess and SHEC).e.00. the assessable value of the product is Rs.x Since.000.94.42% is Rs. 5.984 i.

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