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Excise duty - molasses

Ritzz (CA Final - Article ) (365 Points)

17 August 2013

Dear Friends

I have a query.

Why is the Central Excise duty on Molasses payable by buyer and not by the manufacture? What is the logic behind it??

regards

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3 Replies

Chinnu Raj (CA Final Student B.Com) (1067 Points)
Replied 17 August 2013

Here is the logic for that, molasses is also a form of ethyl alcohol, and is effectively used for making country liquor. And in India we have the problem of illegal manufacturing of country liquor and also after consuming the country liquor many a time people lose their life, so this is a double edged sword for the government, so the government wanted put a check on that.

So the rule was made in such a manner to prevent mill molasses being used in illegal distilleries which evade very high duty on rum alcoholic drinks and also which operates illegally and are prejudicial to the public interest.

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Ritzz (CA Final - Article ) (365 Points)
Replied 18 August 2013

Thanks for replying! But i still have difficulty in understanding the logic.

I hope someone would explain the same in a layman's language.

Regards

Chinnu Raj (CA Final Student B.Com) (1067 Points)
Replied 18 August 2013

Hii Rohan,its nothing frnd.As the country liquor is harmful and many of them had losen their lives and in order to be in the safe side the people who purchase it should only pay the tax instead the company paying it.

Hope now you got it.......

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