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

8/13/2019 Excise duty: ( CENVAT,Types of Excise Duty,Basis Of Payment Of Excise Duty,Who is liable to pay excise duty,Excise duty Calculation)

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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 Imports

encourage foreign retailers setting up shop in India to manufacture theirrequirements in India, rather than import from other countries

It will provide a much needed incentive to the brands and manufacturers

to grow, to scale up, and move to the organized sector


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leverage investments in technology up gradation in the Textiles and JuteIndustry

To overcome technological obsolescence

create economies of scale

The globalization of textiles trade mandated for financial assistance to

domestic industry

The benefits under the TUF Scheme are available for modernization /

expansion of existing units.

And for setting up of new units in various segments of textile and jute

industry.


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Excise Duty of 4% imposed on silver produced or manufactured during theprocess of zinc and lead smelting

cash-strapped government, raised import and excise duties on gold and

silver, hoping to mop up about 600 crore to improve their current account

deficit.

Negative Impact


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Import of raw silk

Hike from 5% to 15%

Silk fabric exports - uncompetitive

Impact on volumes (short term)

18% hike


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Excise duty on marble slabs and tiles increased from INR 30

per square meter to INR 60 per square meter

Excise duty on mobile phones with a value exceeding INR

2000 increased from 1 percent to 6 percent


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Abatement of 35% on excise duty on MRP based assessment

Ayurveda, homeopathy, Unani, Siddha & Bio-chemic

systems of medicines

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