Central excise duty

CENTRAL EXCISE DUTY
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CONTENTS
 Introduction
 Law of central excise duties
 Liability of Goods
 Excise Duty Rate in India
 Products with Excise Duty Charges
 Excisable Goods
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CENTRAL EXCISE DUTY INTRODUCTION
 Excise duty is a type of indirect tax levied on production or manufacture of
excisable goods in India.
 The Excise Duty is collected by Central Board of Excise and Customs (CBEC).
 In Union Budget of India 2016, an excise duty of 1% without input tax credit and
12.5% with input tax credit has been imposed on the articles of jewellery except
silver jewellery.
 Excise Duty on alcoholic preparations, alcohol, and narcotic substances is collected
by the State Govt and is called “State Excise Duty”.
 The Excise Duty on rest of goods is called “Central Excise Duty” and is collected in
terms of Section 3 of the CEA (Central Excise Act), 1944.

LAW OF CENTRAL EXCISE DUTIES
 Central Excise Act: This is the basic law related to the levy and collection of duties
of central excise. However, this Act does not contain the Central Excise rate at
which duties are imposed.
 Central Excise Tariff Act: This Act classifies various goods on which central excise
duties are levied and prescribes the Excise rates at which the duty is payable.
 Central Excise Rules, 1944: All manufacturers of excisable goods are required to
register under these rules. The excise registration is valid as long as production
activity continues and no renewals are necessary.

LIABILITY OF GOODS
 Excise Duty is levied if the following conditions are satisfied.
 There must be goods.
 Goods must be excisable (means the goods must be specified in CETA (central
excise tariff act)).
 Goods must be man
 Goods must be manufactured or produced.
 Such manufacture or production must be in India (excluding special economic
zone).

EXCISE DUTY RATE IN INDIA
 CENVAT (Central Value Added Tax ) is a tax levied on the production or
manufacture of movable and marketable goods in India.
 The CENVAT tax is levied on a percent basis, either maximum retail price of the
goods or the expressed as a percentage of the transaction value.
 The excise duty rate at which is applied to these goods depends on the
classification of the goods (Products) under the Excise Tariff.

CENTRAL EXCISE DUTY RATE
 Current Excise Duty Rate in India: The Present Excise Duty Rate in India is
12.50% with effect from 1st March 2015 12.00am. The CENVAT Rate is Rounded
off to 12.5% from 12.36% including all taxes.
 Change in Central Excise Duty Rate: The Basic Excise duty rate has been
changed from 12% to 12.50 %. The Central Excise duty in India to be rounded off
to 12.5 % from 12.36 % as per Union Budget 2016-2017
 As per Budget 2015, basic Excise Duty rate has been changed from 12%
to 12.5%. However, Education Cess and Secondary & Higher Education Cess has
been removed.

PRODUCTS WITH EXCISE DUTY CHARGES
 Besides alcohol and narcotics, collected by the corresponding state and Central
Government charges excise duty on the following products.
 Vegetable Products
 Animal Products and Live Animals
 Other Products
 Products Made Out of Nonrenewable Sources

LIABILITY TO PAY EXCISE DUTY
 Taxable Event: Manufacture or production in India is a taxable event.
 Liable to pay duty: Every person who produces or manufactures any excisable
goods or who stores such goods in a warehouse shall pay excise duty.
 Liable to Excise Duty: (Section 3(1) provides that there shall be levy & collected
in such manner as may be prescribed).
 A duty of excise to be called the “Central Value Added Tax (CENVAT)” on all
excisable goods produced or manufactured in India.
 Special Duty of Excise in addition to Excise Duty can be levied as per the second
schedule to central excise tariff act, 1985.

EXCISABLE GOODS
 Excisable Goods: It means which are specified in the first schedule and second
schedule of central excise tariff act 1985.
 Exempted Goods: Those goods which are exempted by way of notification by the
central government.
 Non-excisable goods: Not specified in 1st and 2nd schedule of central excise tariff
act 1985 therefore, no excise duty is leviable.

GOODS MANUFACTURED IN INDIA
 Excisable: Two types of Excisable goods are as follows.
1. Dutiable:
a. Marketable: Marketable Goods are of two types: Movable and Non-movable. Movable
goods are Excise Duty payable whereas for Non-movable goods Excise duty is not
payable.
b. Non-marketable: There is no Excise Duty for Non-marketable goods.
2. Non-dutiable: These are exempted from Excise Duty.
 Non-excisable: There is no Excise Duty for Non-excisable goods.

THANK YOU
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Central excise duty

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