Excise Duty
Excise duty is the tax charged for the licence, sale, or production of specific goods. The Central Board of Excise and Customs administers the taxes, and presently it is levied on only a few specific items, such as petroleum and liquor. Apart from that, it has become a part of indirect taxes, including GST.
Intermediaries or retailers collect excise duty from their consumers as indirect tax and then pay it to the government. Generally, excise duty is payable on the removal of goods from the warehouse or place of production for sale, but it is supposed to be payable on the manufacturing of goods. For the imposition of excise duty, there is no need for the literal sale of the goods, but it can be imposed only after the manufacturing.
What are the Different Kinds of Excise Duty?
The different kinds of excise duty in India include the following:
- Basic Excise Duty
The primary excise duty is also called the Central Value Added Tax. The tax is levied on the goods specified in the first schedule of the Central Excise Tariff Act of 1985. Apart from salt, the tax is imposed on all the excisable goods in India.
- Special Excise Duty
The special excise duty is charged on certain goods specified in the second schedule of the Central Excise Tariff Act 1985. The same act also mentions the rate at which it is imposed.
- Additional Excise Duty
The additional excise duty is levied on the goods mentioned in the first schedule of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The state and central government charge the duty as a substitute for sales tax.
When to Pay Excise Duty?
You need to pay the excise duty when you produce or manufacture goods. Under the Central Excise (Amendment) Rules 2002 Rule no. 8, you should pay the duty on the fifth day of the following month from the day of removal of the goods from the factory or warehouse to be sold. If you pay the excise duty through net banking online, the due date gets extended until the sixth day of the month.
Who Should Pay Excise Duty?
The excise duty of India is charged on the production or manufacturing of goods. If you are a manufacturer or producer of goods, you must pay the government the excise duty. The beings that need to pay the excise duty include the following:
- The entity or individual is responsible for manufacturing goods by other parties.
- Entity or individual is responsible for manufacturing goods by hiring labour.
- The entity or individual producing or manufacturing goods.
How to Pay Excise Duty?
In 2017, the Central Board of Excise and Customs introduced the Electronic Accounting System for Excise and Service Tax. The system is a web-based payment gateway which permits you to pay your central excise duties and service tax online. From 1st October 2014, it has been made mandatory for you to pay your excise duties and service tax online through net banking.
The payment process online includes the following:
- Visit the payment website and select the e-payment option.
- Enter your assess code given by the jurisdictional commissioner. The code will be verified online once you put it in.
- Fill in your details, such as the address, name, jurisdictional commissioner information, etc.
- Select the accounting codes for excise from the tax-type menu.
- Select the bank through which you want to pay once you have selected the accounting code.
- Before you are redirected to your bank’s website, you’d be allowed to review your information. Once you are satisfied, you can move on to the payment.
- Once you get to your bank’s website, you can log in to the portal with your password and user ID. You can enter the tax amount that needs to be paid and the bank account through which you must pay it.
- When you make the payment successfully, a challan gets generated, which has the CIN or the Challan Identification Number. You will need to keep proof of the payment.
- Once this is done, you need to use your challan status inquiry to verify whether the payment has successfully been made. Read more..