What is an excise duty?

Rationale Types of Excise Basic , Additional & Special

Exception from paying excise

Calculating Excise on MRP Calculating Assessable Value on MRP E.g. MRP of Product A is Rs 100 and assessable value is given as 70%. Excise Duty = Assessable Value on MRP * Excise = 70 * 0.103 =Rs 7.21

What is customs duty?

Duty Free

Sales can be broadly classified in three categories.

(a) Inter-State Sale (b) Sale during import/export (c) Intra-State (i.e. within the State) sale.

Central Sales Tax, 1956, imposes sales tax on goods sold in inter-state trade or commerce in India;
Note: State Government can impose sales tax only on sale within the State.

CST is payable on inter-State sales @ 2%, if C form is obtained. No CST if form H or I is obtained from purchaser. Otherwise, CST rate is same as applicable for sale within the State. Even if CST is levied by Union Government, the revenue goes to State Government. State from which movement of goods commences gets revenue. CST Act is administered by State Government.

Service Tax is a form of indirect tax imposed on specified services called "taxable services". Service tax cannot be levied on any service which is not included in the list of taxable services. Over the past few years, service tax been expanded to cover new services.

The objective behind levying service tax is to reduce the degree of intensity of taxation on manufacturing and trade without forcing the government to compromise on the revenue needs..

Some of the major services that come under the ambit of Service Tax are:
Telephone Stockbroker General Insurance Advertising agencies Real Estates Agents/Consultants Credit Rating Agencies Health and fitness center's Event Management

Current Rate 10% Most recent changes were for the housing societies(2008) and general drop in ST(2009)

Basic purchase price 10,000 Add 12.5 % VAT 1,250 ________________________________________________________ VAT inclusive purchase price 11,250 Less VAT input (INPUT VAT) 1,250 ________________________________________________________ VAT free purchase price 10,000 Add overheads 100 ________________________________________________________ Total 10,100 Add 20 per cent profit margin 2,020 _______________________________________________________ Total 12,120 Basic selling price 13,620 ________________________________________________________ Add 12.5 % VAT (OUTPUT VAT) 1,515 VAT inclusive selling price 13,635 ________________________________________________________
VAT Payable = Output VAT Input VAT = 1515-1250 = 265

VATs standard rates - 4 percent or 12.5 percent

Alteration of VAT rates by few Indian states: eg: 5% and 15 % respectively, with effect from 1 April 2008 in Gujarat. Till March 2010, around 17 states have increased the basic slab rates of 4 percent (up to 5 percent) and 12.5 percent (up to 15 percent).

Some goods are exempted.

Some goods are charged at 20 % such as petroleum products, gasses used for fuel, liquor and beer

TAXABLE

550 items covered 270 items of basic needs, like medicine, drugs, agro & industrial inputs, capital & declared goods - 4% VAT Gold, jewellery, diamonds, etc - 1% VAT Rest - 12.5% VAT.

Rendition of services is also not subject to VAT

NOT TAXABLE Manual or animal driven agriculture implements Milk, fresh plants, sampling, fresh flowers Fresh vegetables and fruits Meat, fish, prawn, and other aquatic products when not cured, or frozen, eggs, and livestock Textiles The export of goods is zero rated.

Octroi is levied on the entry of goods into a particular state/ municipal jurdiction. Octroi is levied only in certain areas of the state of Maharashtra. The octroi rates vary from municipal limit to municipal limit depending on the type of goods. Set-off of octroi paid is not available against the VAT payable.