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What is Excise Duty, Excise duty Meaning, and Types of Excise Duty In India

According to section 3 of the central excise duty “Excise duty meaning is a tax which is charged on the sale of certain products. The customer does not pay excise duty directly to the authorities, but it is added to the cost of the product by the producer/seller or merchant and then passed on to the consumer with increased prices.

What is Excise Duty, Excise duty Meaning, and Types of Excise Duty In India

According to section 3 of the central excise duty “Excise duty meaning is a tax which is charged on the sale of certain products. The customer does not pay excise duty directly to the authorities, but it is added to the cost of the product by the producer/seller or merchant and then passed on to the consumer with increased prices. It is a customs duty in that it applies to the items created domestically in India, whereas Customs apply to goods imported from outside the nation. The regulation of the Excise Duty Act, 1944 drives the regulations related to excise duty in India, and the tax is levied by the Central Board of Excise and Customs in India. Shortly, Excise duty meaning is a duty on the manufacture or production of domestic goods in India. SEZ which means (the Special Economic Zone) area is kept out of the ambit for the levy of Excise duty. Excise duty is not levied on imported goods because these goods are not manufactured in India.

Types of excise duty

There are three types of excise duty which are as follows- Basic Excise Duty: Also referred to as Central Value Added Tax (CENVAT), The very integral excise duty is applicable on goods that are liable as per the 1985 Central excise tariff Act’s first schedule. As a whole, essential excise duty is applicable on all goods but salt under the 1944 Central Excise Act’s Section 3(1) (a). Special Excise Duty: Some special goods under Schedule 2 of the Central Tariff come under the Special Excise Act, 1985. Additional Excise Duty: Additional excise duty is applicable on the goods that are under Schedule 1 which shows (under the 1957 Additional Duties of Excise Act’s Section 3) includes. Central and State Governments levy this kind of excise duty on a particular good in exchange for sales tax.

Who is liable to pay excise duty?

As per the law, those individuals or parties are liable to pay excise duty including - Individuals/Persons or entities that are involved in goods manufacturing Those Individuals/Persons or entities that have goods produced by other parties or commodities. Persons/Individuals or entities that deal in goods and services produced by hiring laborers. Now You all know the definition of excise duty, types, and eligibility, now let’s get into when and how to pay such excise duty.

Products liable for excise duty

Several products are liable for excise duty. The Central Government levies excise duty on these products. These are as follows- Non-renewable Products: The products which are made from non-renewable sources of energy, including metals and other industrial chemicals are liable for the excise duty category. Animal Products: These kinds of product includes live animals, egg, fish, meat, honey, and other edible animal products. However, other vegetable products consist of flowers, leaves, plants, and edible vegetables. Miscellaneous Products: Miscellaneous products are such as spices, vegetable extracts, starch, malt, seeds, etc.

How to pay excise duty

From the very onwards 1st of October 2014, taxpayers are required to pay excise duty through net banking by using a CBEC payment gateway. It is called the electronic accounting system in excise and service Tax (EASIEST). Follow the below-mentioned steps to pay the excise duty. The first step is to visit the payment website- and select the e-payment option. Then enter the 15-digit Assessee Code (verified online) which is issued by the jurisdictional Commissionerate. Thirdly, you are required to fill in the relevant details of the assessee like name, address, jurisdictional Commissionerate information, etc. Then from the tax-type dropdown menu, choose the accounting codes for excise. After choosing the accounting codes, choose the relevant bank for making the payment. Before redirecting to the bank’s website, The website will give you a chance to rectify the information filled you. In the fifth step, when are done rectifying the details, you may proceed ahead to payment. For that, you just need to log in to the net banking portal with your correct user ID and password. After doing this enter the relevant deductible amount of tax and the bank account through which it is to be paid. Later, a Challan Counterfoil will be generated containing the Challan Identification Number (CIN) after making the payment successfully. keep this as proof of payment. After all of this, make sure that you had verified that the payment has been made on EASIEST using the Challan Status Inquiry.

Difference between Excise and Customs Duty

Excise duty is imposed on items produced or manufactured within the nation, and customs duty is levied on goods sold in India but manufactured outside of India. The producer/manufacturer/producer of the products is responsible for paying the applicable excise charge. And the importer of the goods will be responsible for paying the customs charge. Difference between GST and Excise duty Excise duty GST Excise duty is collected on product manufacturing/ producing or making GST is levied on every step of the supply chain, from product creator to product sale Excise duty is applicable too when things are removed from the market GST is charged on the supply of products and services. The rates for excise duty are defined by the central excise tariff rules. Excise tax has been imposed at 12.36 percent, but still, it fluctuates based on goods types. GST, on the other hand, has standard rates of 0%, 5%, 12%, 18%, and 28%, depending on the kind of goods. Excise duty returns should be filed every month, and an annual return must be filed by April 30. Returns should be filed every month under GST, an annual return due by September 30.

Frequently asked questions

There are certain goods classified as excisable according to the valuation under section 4 of the Central Excise Act, 1944, and the Central Excise Tariff Act, 1985.

No. the central government levies the excise duty on certain goods except on several goods such as narcotics and alcohol.

The net excise duty on fuel or gasoline items in India would be Rs.32.98 per liter from the very onward May 6, 2020.

In case you do not pay the excise duty then this may lead to a penalty that may be between 25-50% of the duty evaded.

After the goods have been removed from the warehouse, excise duty must be paid on them on or before the 6th of the next month in case you have opted for the net banking gateway for making the payment. But If you are taking any other payment gateways, the deadline is the 5th of the upcoming month. moreover, if the goods have been produced in the month of March, excise duty must be paid before 31st March.

There are three types of excise duty in India Basic excise duty, Special excise duty, and Additional excise duty.

Krishna Gopal Varshney

Krishna Gopal Varshney co-founder & CEO of Myitronline is amongst the top emerging startups of Asia and authorized ERI by the Income Tax Department. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. ”

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