Excise Duty

An excise or excise tax (sometimes called an excise duty) is a type of tax charged on goods produced within the country. It is a form of indirect tax. Excises are distinguished from customs duties, which are taxes on imports. Excises are inland taxes, whereas customs duties are border taxes.

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.

 A cut in excise duty on capital goods to 10% from 12% On small cars excise duty reduced to 8% from 12% Excise duty on sports utility vehicles (SUVs) was cut to 24% from 30% On large and mid-sized cars, the excise duty was reduced to 20% from 27%

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 the manufacture of final product are permissible to be set-off against the excise duty liability on the final products under the CENVAT Credit Rules, 2004.

Separate provisions for capital goods.

Combine provisions in respect of capital goods and inputs

Required submission of declarations.

Does not require any such declaration.

Contained separate provisions for waste and scrap.

Consider waste and scrap as any other final product and make no separate provisions.

Could be availed only on duplicate copy of invoice

Can be availed on any copy of invoice.

Contained provision that duty paying document will be valid only for 6 months.

CENVAT does not contain any such restriction.

Credit on capital goods could be taken immediately.

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

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

1. 2. 3. 4. 5. 6.

Specific Duty Duty based on value(advalorem duty) Duty based on the Tariff value Duty based on maximum retail price Duty based on transaction value Compounded Duty

 Manufacturer or producer of goods, Those whoi. 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

The Central Excise Tariff Act,1985

First Schedule-Basic Excise Duty is leviable

Second schedulespecial Excise duty is leviable

Third schedule-Deemed manufacture in relation to various specified groups.

It is divided in 96 chapters grouped in 20 sections

8 digit classification code

SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SECTION 6 SECTION 7 SECTION 8 SECTION 9 SECTION 10 SECTION 11 SECTION 12 SECTION 13 SECTION 14 SECTION 15 SECTION 16 SECTION 17

ANIMAL PRODUCTS VEGITABLE PRODUCTS ANIMAL OR VEGS FATS PREPARED FOODSTUFF & BEVERAGES MINERAL PRODUCTS CHEMICALS, FERTILIZERS, SOAP ETC PLASTIC , RUBBER & THEIR ARTICLES LEATHER & ARTICLES WOOD , CORK, STRAW & THEIR ARTICLES PULP, PAPER PAPER BOARD ARTICLES TEXTILE & TEXTILE PRODUCTTS FOOTWEAR, HEADGEAR,UMBRELLAS, ARTICLES OF STONE, PLASTER,CERAMIC GLASS PEARLS & PRECIOUS METALS BASE METALS & ARTICLES OF BASE METALS MACHINERY,MECHANICAL APPLIANCES,ELECTRICAL EQUIPMENTS VEHICLES, AIRCRAFTS,VESSELS OPTICAL PHOTOGRAPHIC,MEDICAL,SURGICAL INSTRUMENTS,CLOCKSMUSICAL INSTRUMENTS ARMS & AMMUNITION MISC MANUFACTURED ARTICLES LIKE FURNITURE TOYS ETC WORKS OF ART, COLLECTORS' PIECES & ANTIIQUES

SECTION 18
SECTION 19 SECTION 20 SECTION 21

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

 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 price deductions) / (1+ rate of duty)

Specified goods , all capital goods, intermediate goods and used in the manufacture of specified final products in the manufacturer or specified goods. Genuine specified products of village industry/certain specified goods manufactured in the rural areas by Co-operatives/K.V.I.C., etc. Goods sent abroad as exhibits for exhibition in International Trade Fairs or for demonstration or carrying out tests or trials. Goods manufactured by specified units/Institutions for use by Government Departments or Defence purposes. Duty in excess of 5% ad valorem on pollution control equipment.

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

 Hike in Excise Duty for non-taxi SUVs Change in rate for Chassis Impact on Sales Impact on Companies

 Hike in excise duty on cigarettes by 18% Impact on Prices

Decline in Sales
Impact on the sector as a whole

 Imposed excise duty on Silver

Negative impact on the sector

 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 are second only after agriculture.

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

 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 their requirements 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

 leverage investments in technology up gradation in the Textiles and Jute Industry 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.

 Excise Duty of 4% imposed on silver produced or manufactured during the process 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

Import of raw silk

Hike from 5% to 15% Silk fabric exports - uncompetitive

Impact on volumes (short term) 18% hike

 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

Abatement of 35% on excise duty on MRP based assessment Ayurveda, homeopathy, Unani, Siddha & Bio-chemic systems of medicines