Chargeable good or not

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Querist : Anonymous (Querist)

07 December 2011 If we give manufacture good as gift then what about excise duty on this good

CA. RICHI SAXENA

CA. RICHI SAXENA (Expert)
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08 December 2011 Indian Constitution has given powers to Central Govt. and State Govt. to levy various taxes and duties. Powers of Central and State Govt. are enlisted in Seventh Schedule to our Constitution. Entry No. 84 of list I of Seventh Schedule to the Constitution reads as follows : “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.”

Basic conditions of excise liability - Section 3 of Central Excise Act ( often called the ‘Charging Section’ ) states that ‘There shall be levied and collected in such manner as may be prescribed duties on all excisable goods (excluding goods produced or manufactured in special economic zones) which are produced or manufactured in India - . - . -'. The words ‘goods which are manufactured or produced in India’ are same as those used in Entry No 84 to list I. Thus, the power to levy Central Excise duty is derived from the Constitution. This definition of charging section of Central Excise is vital, because it clearly signifies that there are four basic conditions for levy of Central Excise duty.
(1) The duty is on goods.
(2) The goods must be excisable.
(3) The goods must be manufactured or produced
(4) Such manufacture or production must be in India.
Unless all of these conditions are satisfied, Central Excise Duty cannot be levied.

As such the duty of excise is on manufacture of goods and actual sale is not necessary for levying excise duty on the goods despite of the fact that the excise duty is charged only when the goods are taken out of the premises of manufacture.

So, even if we give manufactured good as gift, the excise duty is still payable.

CA. Richi Saxena
RICHI_SENSEX@YAHOO.COM.AU