What is Excise Duty


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.



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