Central Excise is a duty on excisable goods manufactured or produced in India, other than alcoholic liquor.
Central excise duty liability is principally on ‘manufacturer’, except in a few cases. In the majority of cases, duty rate w.e.f. 24.2.09 is 10% plus education cess of 2% and Secondary and Higher Education Cess of 1%. Thus, generally, duty is 12.36%.
There are some exclusions, partial or full exemptions and higher duties in some cases. As per Appendix IV of CETA, the rate of additional duty on Goods of special Importance is 8% in the majority of the cases. (Section 3(1) of The Additional Duties of Excise (Goods of Special Importance) Act, 1957.
We will be discussing the below topics under the Central Excise Act, 1944
The power of Taxation under Constitution of India is as follows:
(a) The Central Government gets tax revenue from Income-tax (except on Agricultural Income), Excise (except on alcoholic drinks) and Customs.
(b) The State Governments get tax revenue from sales tax, excise from liquor and alcoholic drinks, tax on agricultural income.
(c) The Local Self Governments e.g. municipalities, etc. get tax revenue from entry tax and house
property tax. Article 265 provides that no tax shall be levied or collected except by authority of Law. The authority for levy of various taxes, as discussed above, has been provided for under Article 246 and the subject matters enumerated under the three lists set out in the Schedule-VII to the Constitution.
List I: Union List
|Item No. 82||Tax on income other than agricultural income|
|Item No. 83||Duties of customs including export duties|
|Item No. 84||Duties of excise on tobacco and other goods manufactured or produced in India except alcoholic liquors for human consumption, opium narcotics, but including medical and toilet preparations containing alcohol, opium or narcotics|
|Item No. 85||Corporation Tax|
|Item No. 92A||Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of interstate trade or commerce.|
|Item No. 92B||Taxes on consignment of goods, where such consignment takes place during interstate trade or commerce.|
|Item No. 92C||Taxation of Services|
|Item No. 97||Any other matter not included in the List II, List III and any tax not mentioned in List II or List III|
List-II i.e. the State List
In respect of which the State Government has exclusive powers to levy taxes, are as follows:
|Item No. 46||Taxes on agricultural income|
|Item No. 51||Excise duty on alcoholic liquors, opium and narcotics|
|Item No. 52||Tax on entry of goods into a local area for consumption, use or sale therein (usually called as Octroi)|
|Item No. 54||Tax on sale and purchase of goods other than newspapers except tax on interstate sale or purchase|
List-III : Concurrent List — List III of Seventh Schedule, called “concurrent list”, includes matters where both Central Government and State Government can make laws.