Excise Duty

Excise Duty: Overview

An excise tax, sometimes known as excise duty, is a sort of tax applied on domestically produced commodities as opposed to imported goods, which are subject to customs charges. It is a tax imposed on the making or selling of a good. The Central Value Added Tax is the name given to this tax now. (CENVAT). Unless exempted, duty must be paid on all manufactured items.

Excise Duty is a type of indirect tax that is frequently collected from consumers by a shop, agent, or middleman and then given back to the government. Although this service is payable when the product is manufactured, it is often payable after the product is separated from the manufacturing facility or the warehouse and placed on the market. Since the excise duty is only levied on the manufacturing of these commodities, there is no provision for the precise sale of the goods to be taxed. Excise duty is raised by the Central Board of Excise and Customs (CBEC).

Advantages of Excise Tax

• It offers a sizable and significant potential for revenue.
• The revenue is also rather easy to collect.
• It can be used to influence behaviour for broader social and environmental goals, such as improving public health.

Rules and Regulations Governing the Excise Duty in India

The two acts listed below are principally responsible for managing the legislative framework of excise duty:

• 1985 Central Excise Tariff Act
• 1944 Central Excise Act

The aforementioned two acts serve as a reminder of the regulations that still govern the collection of excise taxes in India. The Central Excise Tariff Act of 1985 sets the rates of Central Excise Duty. While the Central Excise Tariff Act includes a lengthy list of excisable commodities and the rates on them, the Central Excise Act essentially provides descriptions of excise in comparison. In India, excise and customs legislation are imposed by the CBEC, which is governed by the Finance Minister.

Types of Excise Duty in India

Basic Excise Duty: According to the Central Excise Tariff Act of 1985's first schedule, this sort of excise duty is imposed on products. This tax is imposed on all excisable commodities in the nation, with the exception of salt, and is mandated by Section 3(1) (a) of the Central Excise Act, 1944.

Additional Excise Duty: Section 3 of the Additional Duties of Excise, Goods of Special Importance Legislation, 1957 states that this tax is imposed on items listed in Schedule 1 of the given act. In place of the sales tax, the state and federal governments apply this tax on a limited number of commodities. Legislation in this area is also provided by the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978.

Special Excise Duty: Special items listed in the Central Excise Tariff Act of 1985's second schedule are subject to this type of charge or tax.

• Step 1: Choose the e-payment option when you visit the payment website, cbec-easiest.gov.in
• Step 2: Input the fifteen-digit Assessee Code given to you by the local Commissionerate. Online code verification will take place.
• Step 3: Complete the assessee's information, including name, address, and jurisdictional Commissionerate data
• Step 4: Select the accounting Codes for Excise from the tax-type option
• Step 5: Choose the bank through which you wish to make the payment after choosing your accounting code
• Step 6: On the CBEC website, you have the option to examine the information entered before being forwarded to the bank's website. After checking, you can make a purchase
• Step 7: Apply your user ID and password to the net banking interface to log in. Enter the bank account information necessary to pay the tax as well as the amount that must be paid
• Step 8: Following a successful payment, a Challan Counterfoil with the Challan Identification Number will be generated (CIN). It must be kept by you as a record of payment
• Step 9: The next step is to use the Challan Status Inquiry to confirm that the payment was made on EASIEST (electronic access to securities information and execution of secured transactions).

What Are the Outcomes of Avoiding Excise Duty?

Paying your excise duty late might have serious financial repercussions. In accordance with the regulations governing excise duty, the punishment or penalty may range from 25 to 50% of the amount of tax evaded. When the penalty is calculated as a percentage of the excise duty, which is typically a sizable sum, it can have a sizable financial impact.

Documents Required for Excise Duty

• Address proof of authorised signatory
• Memorandum and Articles of Association
• Board resolution in favour of the authorised signatory
• Address proof of the factory
• Map of premises
• PAN (Permanent Account Number) of the applicant
• List of directors
• List of items to be manufactured/ traded
• Details of bank account
• Photograph of the person signing the application
• Date of starting of business
• Address proof of all directors
• The estimated value of plant & machinery
• Central Sales Tax No.
• IEC Code
• Customs Registration No. (BIN No.)
• State Sales Tax No.
• Registrar of Companies Index No.

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