2. Tax
Tax is nothing but money that people have to pay the
Government, which is used to provide public services.
A tax is legally compulsory payment levied by the government
on the persons or companies to meet the expenditure incurred
on conferring common benefits upon the people of a country.
In other words a tax can also be describe as a compulsory levy
where those who are taxed have to pay the sums irrespective of
any corresponding return of services or goods by the
government.
3. Types Of Taxes
Some taxes are direct and others are indirect. Under our
constitution, while the Central Government is vested with the
powers of levy and collection of certain taxes, the State
Governments are empowered to levy and collect certain other
type of taxes.
4. Direct Tax
Income Tax
Entertainment Tax
Gift Tax
Wealth Tax
6. ...Constitutional Framework
Union List State List Concurrent List
• Income Tax
• Custom Duty
• Excise Duty
• Corporation Tax
• Service tax
• Central Sales Tax
• Stamp duty in respect
of bills of exchange,
cheques, promissory
notes, etc
• Taxes on lands and
buildings
• Excise duty on
alcoholic liquor etc
• Entry tax
• Sales Tax
• Tolls
• Luxury Tax
• Stamp duty in respect
of documents other
than those specified in
the provisions of List I
• Stamp duties other
than duties or fees
collected by means of
judicial stamps, but
not including rates of
stamp duty
6
The constant blurring of taxing jurisdiction between the Centre and the
States has necessitated multiple Constitutional challenges
7. Excise Duty
Central excise duty is an indirect tax which is charged on such
goods that are manufactured in India and are meant for
domestic consumption.
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.
8. Importance of central excise duty
Central excise revenue is the biggest single source of
revenue for the Government of India. The Union
Government tries to achieve different socio-economic
objectives by making suitable adjustments in the
scope and quantum of levy of Central Excise duty.
The scheme of Central Excise levy is suitably adapted
and modified to serve different purposes of price
control, sufficient supply of essential commodities,
industrial growth, promotion of small scale industries
and like Authority for collecting the Central Excise
duty.
9. Types of Excise Duties
Basic Excise Duty
This is the duty charged under section 3 of the
Central Excises and Salt Act,1944 on all excisable
goods other than salt which are produced or
manufactured in India at the rates set forth in the
schedule to the Central Excise tariff Act,1985.
10. Additional Duty of Excise
Section 3 of the Additional duties of Excise (goods of
special importance) Act,1957 authorises the levy and
collection in respect of the goods described in the
Schedule to this Act. This is levied in lieu of sales Tax and
shared between Central and State Governments. These are
levied under different enactment's like medicinal and toilet
preparations, sugar etc. and other industries development
etc.
Special Excise Duty
As per the Section 37 of the Finance Act,1978 Special
excise Duty was attracted on all excisable goods on which
there is a levy of Basic excise Duty under the Central
Excises and Salt Act,1944.Since then each year the
relevant provisions of the Finance Act specifies that the
Special Excise Duty shall be or shall not be levied and
collected during the relevant financial year.
11. VALUATION FOR EXCISE DUTY
Specific duty
Tariff value
MRP based valuation
Assessable Value
12. DESCRIPTION (length in mm) BED Rs. Per 1000
sticks (existing rate)
BED Rs. Per 1000
sticks (new rate)
Non filter not exceeding 65 509 No change
Non-filter exceeding 65 but not
exceeding 70
1463 1772
Filter not exceeding 65 509 No change
Filter exceeding 65 but not exceeding
70
1034 1249
Filter exceeding 70 but not exceeding
75
1463 1772
Filter exceeding 75 but not exceeding
85
1974 2390
Other 2373 2875
13. Liability to Pay Excise Duty
Goods themselves cannot pay duty so the person who
create the taxable event must discharge the liability which
he had created. 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-
Those who personally manufacture the goods in question
Those who get the goods manufactured by employing
hired labour
Those who get the goods manufactured by other parties
14. Payment of excise duty
In case of Non-SSI (small scale industries) excise duty is
payable monthly, for SSI it is payable quarterly.
In case of delayed payment, interest should be deposited at the
rate of 13% p.m. or Rs.1000 per day, whichever is higher,
along with duty.
15. Exemptions to Excise Duty
(i) Central excise rules grant exemption from duty if goods
are exported under bond, except export to Nepal and
Bhutan.
(ii) SSI manufacturers having annual turnover of below
Rs.1crore. Once their turnover touches Rs.1crore, they
should give the prescribed declaration to the
Jurisdictional Superintendent of Central Excise.
(iii) Approved/licensed units in Export Processing Zones,
Special Economic Zones and 100% Export Oriented
Units.
16. Benefits of CENVAT
Singla enterprises produces 10kgs of wafers per day by using inputs
of Rs.150. the company added a value of Rs.10 per kg. The excise
duty is 16%. Calculate the total excise duty paid after a month
through (i) with cenvat (ii) without cenvat.
Solution: (i) With Cenvat
Input Cost = Rs.150
Value added = 10×10 = Rs.100
Total = Rs.250
Duty (16%) = Rs. 40
Total = Rs.290
Total duty paid per month = Rs. 40×30
=Rs.1200
17. (ii) Without Cenvat
Input Cost = Rs.150
Duty (16%) = Rs. 24
Total = Rs. 174
Value added = Rs.100
Total = Rs. 274
Duty (16%) = Rs. 43.84
Total = Rs. 317.84
Total duty paid = Rs. (43.84 + 24.00) ×30
=Rs. 2035.20
Hence,With Cenvat is beneficial to the customer
18. Highlights of Union Budget
Basic excise duty on cigarettes and other products is being
increased.
Basic excise duty is being increased on marble slabs and tiles from `
30 per square meter to ` 60 per square meter’
sulphur recovered as by product in refining of crude oil used for the
manufacture of fertilisers is exempt from excise duty.
Branded Ayurvedic medicaments and medicaments of Unani,
Siddha, Homeopathy or Bio-chemic system are being brought under
MRP based assessment with an abatement of 35% from the MRP.
All handmade carpets and carpets & other textile floor coverings of
coir and jute, whether or not handmade, falling under Chapter 57,
are being fully exempted from excise duty
19. Highlights of Union Budget
Excise duty of 4% is being imposed on silver produced or manufactured
during the process of zinc or lead smelting
Excise duty on mobile handsets including cellular phones having retail sale
price more than Rs. 2000/- is being increased from 1% to 6%.
The validity period of concessional excise duty of 6% granted to specified
parts of hybrid and electric vehicles is being extended by two more years up
to 31st March, 2015.
Excise duty on SUVs and engine capacity >1500 cc is being increased from
27% to 30%
20. ITEM EXCISE DUTY
IMFL 200% of೦manufacturing
cost or Rs.160/- per
proof litre
MILD BEER
less than 5% alcohol
100% of೦manufacturing
cost or Rs.15/- per bulk litre
whichever is higher
FEREMENTED BEER
more than 5% alcohol
125% of೦manufacturing
cost or Rs.20/- per bulk litre
whichever is higher
Wine from Grapes within the state without addition of alcohol 100% of೦manufacturing
cost
Mild liquors Liquors other than Beer having alcohol less than 5% 75% of೦manufacturing
cost or Rs.12/- per bulk litre
whichever is higher
Wines from gropes produced within ೦the state with addition of
alcohol
125% of೦manufacturing
cost
21. REFERENCE
• Internet
• Central Board Of Excise and Customs-www.cbec.gov.in
Commissionerate Of State Excise Maharashtra State-stateexcise.
maharashtra.gov.in
