what is "Excise Duty" ? When will we use ?

Question

I need very clear explanation

Answer 1

Excise duty is a duty on production or manufacture of goods. It is a tax levied on manufacture of goods and the liability to pay excise duty arises immediately on manufacture or production of goods.

In India, excise duty is levied in accordance with the provisions of The Central Excise Act, 1944. The following are the main sources of Central Excise Law in India:-

Central Excise Act, 1944

This is the principal act which provides the levy and collection of central excise, prescribes procedures for clearances from factory once the goods have been manufactured, etc.

Central Excise Tariff Act, 1985 (CETA)

This act prescribes the rates of excise duties for various goods. Initially, when the Central Excise Act was passed in 1944, the rates of duties for different goods were given in that Act itself. However, with the increase in the types of goods being manufactured in India, the need for a separate Act for classifying the goods and prescribing the rate of excise duty for each was felt. Therefore, in 1985, the Central Excise Tariff Act was passed classifying goods under 96 chapters which were further divided into groups and sub-groups with the rate of duty prescribed for each sub-group.

Rules

The central government has the power to make rules in order to carry out the purposes of the act. Various rules have been framed under these rules such as Central Excise Rules, 1944 providing for various procedures to be followed for clearance of and storage of goods, accounting of goods, licensing procedures, etc. Since excise law is highly procedure-oriented, it is very essential to follow the rule precisely; otherwise benefits of concessions may be lost. However, if there is any conflict between the provisions of the act and Rules, the provisions of the act shall prevail.

Regulations

The Central Board of Excise and Customs (CBEC) has been empowered to make regulations to carry out the provisions of the act. However, if there is any conflict between the provisions of the rules and regulations, the provisions of the rules shall prevail.

Notifications

The central government may also issue notifications in the Official Gazette for the purposes of the act. The Central government has several notifications under various sections such as partial or full exemption from duty, etc. Each of the rules and notifications has to be placed before the Parliament for approval. If the Parliament modifies the rules or notifications, the modified rules and notifications will be applicable. The government has the power to exempt certain commodities or certain classes of manufacturers from the payment of central excise by notification

Answer 2

Excise duty is a tax levied on manufacturing. When goods manufatured exit the warehouse or factory, this tax becomes payable. In India all excise taxes ather than those on alcohol are regulated by the central Govt.