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The biggest difference between VAT/sales tax and excise duty is that the prior to be charged on consumption of goods, whereas excise is charged on the manufacture and production of goods. Excise duties are also chargeable on a narrower range of products, as compared to VAT and sales tax.
For example:excise is not chargeable on fossil fuels unlike sales tax and VAT. The excise amount is generally accounts for a higher percentage of the maximum retail price of the products.
Types of Excise Registration are-
Manufacture or production of excisable goods in India is taxable event. Central excise duty is charge on manufactured goods & not on sale of goods that means even if goods are not sold, excise duty should be payable on it. Captive consumption, free sample, intermediary goods etc. are also liable to central excise duty even from these goods no revenue is generate. An ownership criterion is irrelevant in paying excise duty. Case Duty is payable at the time of Goods are manufactured.
The term 'Excisable Goods' means the goods which are specified in the first schedule and the second schedule to the Central Excise Tariff Act, 1985, as being subject to a duty of excise and includes salt.
The liability to pay tax excise duty is always on the manufacturer or producer of goods.
There are three types of parties who can be considered as manufacturers-
Documents Required for Excise Registration:
Excise Registration Procedure:
Step 1 :Excise Registration Application to AC/DC [FormA-1(2 copies) and PAN No.]
Step 2: AC/DC will grant Excise Registration Certificate after receipt of application.
Considering the importance and for its promotion small scale industries are exempted from paying of excise duty.
Any Manufacturing unit which has a turnover of less than 1.5 Cr is exempt from payment of Excise duty.
There is a necessity of taxes in any country but it is important to know what the Government does with that money. Taxes are levied to ensure the smooth running of the public services in India. Excise duty is a part of it.
It makes sure that the manufacturing sector is involving themselves in the taxation to cover all aspects. Taxes can also be a tool to control the sale of a good, especially narcotic substances and alcohol. The increase in tax amount of such products may have eventually.
The excisable goods are classified by using 8-Digit system. Description with eight digits is termed as Tariff item.
A Tariff item under eight digit system would be interpreted as follows:
Example:Tariff Entry 3305 90.
Goods mean an article or substance which is produced in India.
Yes, it is mandatory to pay duty on all goods manufactured, unless exempted. For example, duty is not payable on the goods exported out of India. Similarly exemption from payment of duty is available, based on conditions such as kind of raw materials used, value of turnover (clearances) in a financial year, type of process employed etc.
If you take a look at both of these taxes at first, both are taxes levied by the government of India but the most significant difference between the two is that customs duty is a tax levied upon goods imported into the country from foreign countries while excise duty is levied by the government on the goods manufactured in the country. It is important to note that many provisions are common to both customs and excise duty. Also, both taxes have similar procedures of administration, tribunal.
Excise is an event based taxes, and taxes is charged once goods are exit from gate of manufacturing plant. The invoice is made on gate pass basis.
Besides narcotics and alcohol, collected by the corresponding state Government, the Central Government charges excise duty on the following products:
There are three different types of central excise duties which exist in India which are as follows:
Basic - Excise Duty, imposed under section 3 of the 'Central Excises and Salt Act' of 1944 on all excisable goods other than salt produced or manufactured in India, at the rates set forth in the schedule to the Central Excise tariff Act, 1985, falls under the category of basic excise duty in India.
Additional - Section 3 of the 'Additional Duties of Excise Act.
Under the authority of the Central Excise Act, 1944, the taxes are levied on manufacturing or production of goods. The rates for the taxes are specified under the Central Excise Tariff Act, 1985. This duty is chargeable on certain textile products such as yarn, fiber, etc. also excluding the Additional Excise Duty under Additional Duties of Excise (Textiles and Textile Articles) Act, 1975, which are also charged.. The Additional Duties of Excise (Goods of Special Importance) Act, 1957 and Miscel.
All the compliance can be divided in two steps:
It is done in the basis any one of the 2 two provisions enshrined in the Central Excise law in India. These provisions are Valuation under section 4 of the Central Excise Act, 1944 and the Central Excise Tariff Act, 1985, The earlier act is based on normal price where maximum retail price is not to the Central Government or where Tariff values have not been fixed for the articles. Under section 3(2) of the Central Excise Tariff Act, 1985 the valuation is simply based on maximum retail price (MRP).
Central Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the goods are manufactured.
This tax is levied on certain goods for their production or sale catering or on licenses on specific services and activities. Excise duty is an inland tax unlike custom duties is an inland tax. Also this duty charges are a form of india.
Under the different sections of the central excise act, the fines for evading tax can range from twenty-five to fifty per cent of the amount of duty evaded. When you look at the amount of excise you may have to pay, this is a rather large amount and along with the financial repercussions, you also have to encounter a tarnished image.
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