Introduction
Excise duty is a levy imposed on goods
produced domestically. This indirect tax is collected from clients by retailers
or middlemen, who then pay it to the central government.
When manufacturers shift products from their
production area or warehouse to a different location for selling, they must pay
this fee. Since tax is charged on the manufacture of these commodities, neither
the amount nor the actual sale of the goods are taken into account in this
situation. The entire tax collecting procedure is managed by the Central Board
of Excise and Customs (CBEC).
Previously, additional excise duty or central
excise duty were the two ways that excise duty was collected. The government
combined a number of excise charge categories. Currently, excise duty is
applicable to a number of commodities, including alcohol, gasoline, and other
things.
People now understand what excise duty is, so
let’s explore the various sorts of it.
Excise duty types
India had three different types of excise
taxes prior to the implementation of the GST.
Duty on general excise Central VAT is another
name for basic excise duty (CENVAT). This category of excise duty applied to
the commodities listed in the first schedule of the Central Excise Tariff Act
of 1985. This tax was levied in accordance with Section 3 (1) (a) of the
Central Excise Act of 1944.
Increased Excise Tax
Items of special priority were subject to
increased excise duty under the Additional Excise under Additional Duties of
Excise (Items of Special Priority) Act of 1957. This tax was imposed on a
certain class of commodities.
Unique Excise Duty
Special items listed in the Central Excise
Tariff Act of 1985’s Second Schedule were subject to this kind of excise duty.
Who Is Liable for Excise Tax?
Because excise duty is levied on the
production and manufacture of items, the producer or manufacturer of those
commodities is responsible for paying excise duty to the government.
The following three parties are among those responsible for paying excise duty :
The person or organization that created or
produced the products.
The person or organization in charge of hiring
workers to make goods is the person or organization in charge of overseeing the
production of items made by third parties.
When Should Excise Duty Be Paid?
At the moment of the removal of the goods,
excise duty must be paid. The excise duty on the creation or manufacturing of
items is due from assessees. Excise duty must be paid in accordance with Rule
No. 8 of the Central Excise (Amendment) Rules, 2002, on the fifth day of the
month after the products were taken out of the warehouse or factory for sale.
The sixth day of the following month is the deadline for excise duty payments
made online through netbanking.
The payment must be made by March 31 if it is
made in March.
On a number of products, the central
government levies excise duty.
Products made from non-renewable energy
sources, such as metals and industrial chemicals, come under this category.
Live animals, fish, meat, eggs, honey, and
other edible animal products are all included in the category of “animal
products.” Plants, flowers, leaves, and edible vegetable components are
examples of additional vegetable products. Spices, starch, malt, seeds,
vegetable extracts, and other items fall under the category of “other
products.”
The distinction between excise tax and customs
tax
While items produced or manufactured
domestically are subject to excise duty, goods sold domestically but made
abroad are subject to custom duty. Excise duty must be paid by the product’s manufacturer,
not by the purchaser. The importer of the items is responsible for paying the
custom duty.
Excise duty and custom duty share a number of
regulations, with the main distinction being the location of the relevant
commodities production.
What
negative effects result from avoiding excise duty ?
The consequences of not paying your excise
duty on time might be very costly. The amount of the penalty can range from 25
to 50 percent of the amount of the tax that was evaded, as per the legislation
governing excise duty. When the penalty is computed as a percentage of the
excise duty, which is typically a large sum, it might have a significant
financial impact.
FAQs
How are products categorized as excisable, first ?
Some products are categorized as excisable in
accordance with the valuation under Section 4 of the Central Excise Act of 1944
and the Central Excise Tariff Act of 1985.
Does the state government levy excise duty ?
No, the central government imposes excise
duty, with the exception of particular goods like alcohol and narcotics.
Has the GST replaced excise taxes ?
Yes, the Goods and Service Tax (GST) and other
indirect taxes have absorbed excise duty. However, certain products like
alcohol and gasoline continue to be subject to excise taxes.
What
occurs if I don’t pay the excise duty ?
A penalty for failing to pay excise duty could
be in the range of 25–50% of the amount that was avoided.
When
should excise duty be paid ?
Excise duty must be paid on the items once
they have been taken out of the warehouse by the sixth of the following month,
if paying through net banking. The deadline is the fifth of the next month if
you are utilizing alternative payment methods. The excise duty must be paid
before March 31st, though, if the items were distributed in March.
Where
can I make my Excise Duty payment ?
By going to cbec-easiest.gov.in and choosing
the e-payment option, you can make the payment online.
What
kinds of excise taxes are imposed in India ?
Excise duties come in three varieties: basic, special,
and additional