Excise duty: ( CENVAT,Types of Excise Duty,Basis Of Payment Of Excise Duty,Who is liable to pay...

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    Excise Duty

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    An excise or excise tax (sometimes called an excise duty) is atype of tax charged on goods produced within the country.

    It is a form of indirect tax.

    Excises are distinguished from customs duties, which are taxeson imports. Excises are inland taxes, whereas customs dutiesare border taxes.

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    The term "excisable goods" means the goods which are specified

    in the First Schedule and the Second Schedule of the Central

    Excise Tariff Act, 1985 , as being subject to a duty of excise and

    includes salt.

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    A cut in excise duty on capital goods to 10% from12%

    On small carsexcise duty reduced to 8% from 12%

    Excise duty on sports utility vehicles (SUVs) wascut to 24% from 30%

    On large and mid-sized cars, the excise duty wasreduced to 20% from 27%

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    CENVAT Credit Rules

    To remove the cascading effect of excise duty, the Excise Duty

    paid on the inputs and capital goods, which are used in themanufacture of final product are permissible to be set-off against

    the excise duty liability on the final products under the CENVAT

    Credit Rules, 2004.

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    Could be availed only onduplicate copy of invoice

    Contained provision that dutypaying document will be valid only

    for 6 months.

    Credit on capital goods could betaken immediately.

    Can be availed on any copy ofinvoice.

    CENVAT does not contain anysuch restriction.

    Credit has to be taken in twoyearly instalments of 50% each.

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    Basic-u/s 3 of the 'Central Excises and Salt Act' of

    1944

    Additional-u/s 3 of the 'Additional Duties of Excise Act'

    of 1957

    Special-u/s 37 of the Finance Act, 1978

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    1. Specific Duty

    2. Duty based on value(advalorem duty)

    3. Duty based on the Tariff value

    4. Duty based on maximum retail price

    5. Duty based on transaction value

    6. Compounded Duty

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    Manufacturer or producer of goods, Those who-

    i. personally manufacture the goods in question

    ii. get the goods manufactured by employing hired labour

    iii. get the goods manufactured by other parties

    To pay 25-50% of the amount of duty evaded

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    The Central Excise Tariff Act,1985

    First Schedule-BasicExcise Duty is leviable

    Second schedule-special Excise duty is

    leviable

    Third schedule-Deemedmanufacture in relation tovarious specified groups.

    It is divided in 96 chapters grouped in 20 sections

    8 digit classification code

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    SECTION 1 ANIMAL PRODUCTS

    SECTION 2 VEGITABLE PRODUCTS

    SECTION 3 ANIMAL OR VEGS FATS

    SECTION 4 PREPARED FOODSTUFF & BEVERAGES

    SECTION 5 MINERAL PRODUCTS

    SECTION 6 CHEMICALS, FERTILIZERS, SOAP ETC

    SECTION 7 PLASTIC , RUBBER & THEIR ARTICLES

    SECTION 8 LEATHER & ARTICLES

    SECTION 9 WOOD , CORK, STRAW & THEIR ARTICLES

    SECTION 10 PULP, PAPER PAPER BOARD ARTICLES

    SECTION 11 TEXTILE & TEXTILE PRODUCTTS

    SECTION 12 FOOTWEAR, HEADGEAR,UMBRELLAS,

    SECTION 13 ARTICLES OF STONE, PLASTER,CERAMIC GLASS

    SECTION 14 PEARLS & PRECIOUS METALS

    SECTION 15 BASE METALS & ARTICLES OF BASE METALS

    SECTION 16 MACHINERY,MECHANICAL APPLIANCES,ELECTRICAL EQUIPMENTS

    SECTION 17 VEHICLES, AIRCRAFTS,VESSELS

    SECTION 18

    OPTICAL PHOTOGRAPHIC,MEDICAL,SURGICAL INSTRUMENTS,CLOCKSMUSICAL

    INSTRUMENTS

    SECTION 19 ARMS & AMMUNITION

    SECTION 20 MISC MANUFACTURED ARTICLES LIKE FURNITURE TOYS ETC

    SECTION 21 WORKS OF ART, COLLECTORS' PIECES & ANTIIQUES

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    The basic rate of excise duty is 16%

    there is a special duty if 8% which makes the excise duty in

    those cases at 24%.

    There is at present an education cess, which is 2% of theexcise duty

    The effective excise duty comes out as 16.32% or 24.48%.

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    Following items are included:

    1. Primary packing or main packing or necessary packing.

    2. Royalty charges.

    3. Commission to sales agent

    Following items are excluded:

    1. Secondary packing.

    2. Returnable primary packing like cold drinks bottles, LPG cylinders.

    3. Discount given at the time of sales.

    Assessable Value = (sale pricedeductions) /

    (1+ rate of duty)

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    Goods produced in a educational and research institute during the course of

    technical training .

    Goods produced in Government Factories, Mines, Mints, prisons Defence

    Production etc.

    Duty in excess of 10% is exempted on goods for supply to Gas Authority of India

    Limited, Oil and Natural Gas Corporation Ltd., or the Oil India Limited.

    Certain specified goods connected with solar and natural energy.

    Specified goods used by units in Export Processing Zones/Free Trade Zones/100%

    Export Oriented undertakings but not sold within India

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    Hike in Excise Duty for non-taxi

    SUVs

    Change in rate for Chassis

    Impact on Sales

    Impact on Companies

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    Imposed excise duty on Silver

    Negative impact on the sector

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    Indian Textile Industry is one of the leading textile industries in the world.

    It contributes about 14% to industrial production, 4% to the GDP, and 17%

    to the country's export earnings.

    Estimated Size 89 Billion and expected to rise to 223 billion by 2021

    Domestic Textile market in India is 58 billion and will grow to 141 billion

    by 2021

    It also provides direct employment to over 35 million persons which aresecond only after agriculture.

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    4.5% in the world is the share of the textile market of India.

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    Prices of garments had risen by near 25% ever since a net rise of 3.6% on

    excise duty was introduced in 2012-13

    The Indian ready made garment industry was limping.

    The Centre had levied 10% central excise duty during 2010-11 and

    increased to 12% during 2012-13 budget.

    Roll back on Excise Duty to 0% Excise Duty

    protection to the domestic industry from cheap I