Introduction to Central Excise

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    INTRODUCTION

    The Central Excise duties are the largest source of revenue for the country. Approxi ately !"# of the total revenue receipts are collected fro CentralExcise duties. The levy and collection of Central Excise duties is under theauthority of Central Excise Act$ %&''. (ection ! )also *no+n as the chargingsection, provides for the levy and collection of Central Excise duty.

    The rate and a ount of duty as +ell as the ite s on +hich duties are levied arethose +hich are indicated in the Central Excise Tariff Act$ %&- and the scheduletherein. The taxa/le event for Central Excise duty as per (ection ! of CEA)Central Excise Act, %&'' is the anufacture or production of goods.

    It eans that Central Excise duty is levia/le as soon as the goods areanufactured or produced. The ite s on +hich the excise duty is levied are*no+n as excisa/le goods.

    0or the purpose of ad inistrative convenience the actual collection of duty isdone at the ti e of re oval of goods fro the place of anufacture ofproduction. The rate of duty$ +hich is levied$ is the rate of duty applica/le to suchgoods or +hich is in force at the ti e of actual re oval.

    Additional Excise Duty )AED,1 2 This duty is levied on certain specified goods inter s of various other statutes such as1

    Additional Duties of Excise )3oods of special i portance, ACT$ %& 4 Additional Duties of Excise )Textiles and Textile Articles, ACT$ %&4-

    CENTRAL EXCISE CONTROL

    0ollo+ing types of control have /een proscri/ed for the levy and collection ofCentral Excise duties1 2

    5hysical Control (elf Re oval (che e

    PHYSICAL CONTROL

    Under the physical control syste the anufactured goods are re oved for theplace of anufacture under the supervision of the Central Excise officers on after the assess ent and pay ent of appropriate Central Excise duty. The goods arere oved on an invoice indicating the duty paid +hich is countersigned /y theCentral Excise officer. The physical control syste is applica/le on in respect ofanufacturers of cigarettes and atches.

    http://cenexcisenagpur.nic.in/Excise/tarrif.htmhttp://cenexcisenagpur.nic.in/Excise/tarrif.htm
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    SELF-REMOVAL PROCEDURE.

    Under the (elf2Re oval 5rocedure )(R5, the goods are re oved on pay ent of duty and against invoices signed /y the assess. The actual assess ent of theduty paid is done after+ards /y the Central Excise officers on onthly returns

    filed /y the assess.

    In this case uch ore responsi/ility has /een vested on the assesses to paythe duty correctly and re ove the goods only on pay ent of the duty assessed/y hi . 6o+ever$ in this syste the assesses is re7uired to file a declaration)Rule %4!8 of CER %&'', giving classification of the goods$ tariff heading$ rate ofduty and the exe ption notification availed of if any.

    6e is also re7uired to sell the goods against an invoice at prices$ +hich are inaccordance +ith (ection ' of the Central Excise Act %&''. The (elf2Re oval5rocedure also provides that the assesses should aintain records of

    production$ re ovals$ ra+ aterial$ 9OD:AT accounts$ accounts of 5;A.9onthly returns are scrutinised /y the Central Excise Officers so as to ensureproper pay ent of duty on the goods anufactured and re oved.

    In the record /ased control syste of assess ent ore trust is given to theassesses. The records /ased control is applica/le to

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    0or an excise officer or assesses to calculate and deter ine the correctness ofduty paid the crucial date is ost i portant.

    The effective date +hich is applica/le to a particular co odity +ill /e the rate inforce on the date on +hich the goods are actually re oved fro the factory in

    ter s of Rule &A of the CER2%&''. That is$ the date on +hich the goods leavethe factory is the crucial date for deter ining the rate of duty.

    Central Excise Duty - Introduction0or the Assess ent @ear

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    he ad &alorem component of excise duty of ;% on petrol intended for sale with a brand name to becon&erted into a specific rate* !onse uently, such

    petrol would now attract total excise duty of )s*24* # per litre instead of 3 5;% 6 )s*2" per litre3 7*

    he ad &alorem component of excise duty of ;% ondiesel intended for sale with a brand name to becon&erted into a specific rate* !onse uently, suchdiesel would now attract total excise duty of )s*4*-

    per litre instead of 3 5;% 6 )s*"*+ per litre3 7* Excise duty on manmade fibre and yarn to be

    increased from 4% to 8%* Excise duty on ' < and $ to be increased from 4%

    to 8%*

    Excise duty on polyester chips to be increased from4% to 8%*

    Excise duty on acrylonitrile to be increased from 4% to8%*

    he scheme of optional excise duty of 4% for purecotton to be restored*

    Excise duty for man1made and natural fibres other than pure cotton, beyond the fibre and yarn stage, to beincreased from 4% to 8% under the existing optionalscheme*

    nits using indigenous raw materials0inputs for manufacture of such goods*

    (ull exemption from excise duty to be pro&ided ongoods of !hapter ;8 of !entral Excise ariffmanufactured at the site of construction for use inconstruction work at such site*

    Excise duty exemption on 3 5recorded smartcards3 7 and 3 5recorded proximity cards andtags3 7 to be made optional* $anufacturers ha&e theoption to pay the applicable excise duty and a&ail thecredit of duty paid on inputs*

    E.< compound manufactured on job work for furtheruse in manufacture of footwear to be exempted from

    http://finance.indiamart.com/taxation/excise_duty/http://finance.indiamart.com/taxation/excise_duty/
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    excise duty* enefit of SS? exemption scheme to be extended to

    printed laminated rolls bearing the brand name ofothers by excluding this item from the pur&iew of the

    brand name restriction* =n packaged or canned software, excise duty

    exemption to be pro&ided on the portion of the &aluewhich represents the consideration for transfer of theright to use such software, subject to specifiedconditions*

    Excise duty on branded articles of jewellery to bereduced from +% to @il*

    he !ustoms

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    !entral excise re&enue is the biggest single source of re&enue for the Bo&ernment of?ndia* he >nion Bo&ernment tries to achie&e different socio1economic objecti&es bymaking suitable adjustments in the scope and uantum of le&y of !entral Excise duty*he scheme of !entral Excise le&y is suitably adapted and modified to ser&e different

    purposes of price control, sufficient supply of essential co odities , industrial growth,

    promotion of small scale industries and like

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    of registration. These are ainly

    Those +hose goods are exe pted for pay ent of duty on the /asis of theaggregate annual value of their clearances /eing /elo+ the li it of Rs " lacs.

    6o+ever$ even in respect of such units$ they are re7uired to give a declarationto the Central Excise depart ent each year /efore the % th April indicating thegoods anufactured and the value of the annual clearances.

    (ection > provides that the prescri/ed person)s, get hi self )the selves,registered +ith the Furisdictional Central Excise Authorities.

    Rule %4' of the Central Excise Rules$ %&'' further re7uires every person$ +ho

    cures$ produces$ anufactures$ carries on trade$ deals as a /ro*er orco ission agent$ or holds private store roo or +arehouse or other+ise usesexcisa/le goods or a person +ho issues invoice or invoices$ to get hi selfregistered and not to engage hi self in the said activities +ithout a*ing anapplication for such registration to the Furisdictional Range Officer in thespecified for called the GApplication for Registration? R2% )clic* to do+nload,

    Reg"s$'&$"o* o# De&le's.

    The dealers of excisa/le goods +ho +ish to issue odvata/le invoices$ so as topass on odvat credit to the anufacturers$ have to get the selves registeredunder rule %4' of CER$ %&'' +ith the Central Excise depart ent as per theprovisions of Notification !

    The person=persons +ho +ish to get Central Excise Registration has to a*ean application for registration to the Furisdictional (uperintendent of CentralExcise in the for R2%.

    http://cenexcisenagpur.nic.in/Excise/R1.ziphttp://cenexcisenagpur.nic.in/Excise/R1.ziphttp://cenexcisenagpur.nic.in/Excise/R1.ziphttp://cenexcisenagpur.nic.in/Excise/R1.ziphttp://cenexcisenagpur.nic.in/Excise/R1.ziphttp://cenexcisenagpur.nic.in/Excise/R1.zip
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    T e &++l"!&$"o* s o)ld !o*$&"*

    %. 5articulars of the person applying for registration$ na e of the fir $address$ other details li*e inco e2tax nu /er$ sales tax nu /er$/an*ers na e$ account nu /ers.

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    '. On the value or 7uantity of clearances of the goods ade in a financial yearHor

    . (u/Fect to conditions$ if any$ specified in the said schedule in respect of suchgoodsH or su/Fect to conditions$ if any$ specified in any notification issued undersu/2rule )%, of rule - or the said rules or su/2section )%, of (ection A of theCentral Excise Act$ %&''$ as the case ay /eH

    In such cases the anufacturer has to file a declaration in the for prescri/ed/efore % th April of e