MARKING PATTERN

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@*CS Siddharth Bumb. *

@*CS Siddharth Bumb. * (Querist)
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14 October 2009

@*CS Siddharth Bumb. *

@*CS Siddharth Bumb. * (Querist)
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18 December 2009 May I know more and basic about Excise?

Asha Kanta Sharma

Asha Kanta Sharma

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03 August 2024 Certainly! Excise duty is a type of indirect tax levied on goods manufactured within a country. It is typically imposed on the production or sale of certain goods, such as alcohol, tobacco, and petroleum products. Here’s a basic overview of excise duty and its key components:

### **1. What is Excise Duty?**

**Excise Duty** is a tax levied on specific goods produced domestically. Unlike sales tax, which is imposed on the final sale to consumers, excise duty is imposed at various stages of production or distribution.

### **2. Key Aspects of Excise Duty:**

#### **a. Types of Excise Duty:**
- **Specific Duty:** Imposed per unit of the product (e.g., per liter or per kilogram).
- **Ad Valorem Duty:** Imposed as a percentage of the value of the product (e.g., 10% of the sale price).
- **Combination Duty:** A mix of both specific and ad valorem duties.

#### **b. Scope and Application:**
- **Products Covered:** Commonly applied to products such as alcohol, tobacco, petroleum products, and luxury goods. Different countries have different lists of excise goods.
- **Manufacturing Stage:** The duty is typically levied at the manufacturing stage, before the goods reach the consumer.
- **Excise Bond:** Manufacturers may be required to post a bond to cover potential excise duties on goods produced.

#### **c. Calculation:**
- **Specific Duty Calculation:** Based on quantity or volume (e.g., Rs. 50 per liter of alcohol).
- **Ad Valorem Duty Calculation:** Based on the product’s value (e.g., 10% of the selling price).

### **3. Excise Duty in India:**

#### **a. Legal Framework:**
- Governed by the **Central Excise Act, 1944**, and various notifications issued by the Central Board of Indirect Taxes and Customs (CBIC).

#### **b. Recent Changes:**
- With the introduction of the **Goods and Services Tax (GST)** in India from July 1, 2017, the scope of excise duty has been largely reduced. However, excise duty still applies to specific products like tobacco and petroleum products.

#### **c. Filing and Compliance:**
- **Excise Returns:** Manufacturers need to file periodic excise returns with the authorities.
- **Records:** Maintenance of detailed records of production, stock, and sale is required.
- **Audits:** Companies may undergo audits to ensure compliance with excise duty regulations.

### **4. Practical Examples:**

- **Alcohol Manufacturer:** A distillery producing alcohol will pay excise duty based on the quantity produced. The duty is usually paid before the alcohol is sold.
- **Tobacco Products:** Manufacturers of cigarettes or cigars will pay excise duty based on the quantity or value of the products.

### **5. Key Points to Remember:**

- **Excise Duty vs. Sales Tax:** Excise duty is levied on production, while sales tax is levied on the sale of goods.
- **Impact on Prices:** Excise duties can affect the retail price of goods, as manufacturers often pass on these costs to consumers.
- **Regulatory Compliance:** Manufacturers must adhere to specific regulations and maintain records to ensure compliance with excise duty laws.

### **Summary:**

Excise duty is a tax on certain goods produced within a country. It is levied at the manufacturing stage and can be calculated based on quantity or value. In India, while excise duty has been largely replaced by GST for many goods, it still applies to specific categories such as alcohol, tobacco, and petroleum products. Proper compliance and record-keeping are essential for manufacturers to manage excise duty effectively.

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