Indirect Tax Basics

Kinds of Excise Duty :

There are three kinds of excise duty collected in India namely- Basic, Additional and Special.

Basic Excise Duty :
This is the duty charged under section 3 of the Central Excises and Salt Act,1944. All the excisable goods other than salt which are produced or manufactured in India are covered under this Act.

Additional Excise Duty :
Additional duties of Excise Act,1957,(section 3), authorises levy and collection in respect of the goods described in the Schedule to this Act. This includes goods of medicinal and toilet preparations, sugar etc. is levied in lieu of sales Tax and shared between Central and State Governments.

Special Excise Duty :
As per the Section 37 of the Finance Act,1978 Special excise Duty was charged on all excisable goods on which there was a levy of Basic excise Duty under the Central Excises and Salt Act,1944. Since then each year the relevant provisions of Finance Act specify that the Special Excise Duty shall be or shall not be levied and collected during that financial year.

Liability to pay Excise Duty :
It is the liability of the manufacturer or the producer of the goods to pay the duty. The manufacturer can be considered as those who:

* personally manufacture the goods in question
* get the goods manufactured by employing hired labour
* get the goods manufactured by other parties

Every manufacturer is liable to clear of the duties by first fortnight of every month i,e, by the 16th day of that month, and in respect of clearances made during the second fortnight of the month, by the last working day of that month.
The assessee can pay duty from two accounts: Current account(or PLA) and Modvat account.

REGISTRATION AND ECC CODE:

Registration:
Every manufacturer of excisable goods is required to get himself registered under the Central Excise law. Every person intending to issue invoices under Rule 57G or Rule 57T or to procure excisable goods under bond for special industrial purposes in terms of provisions of Chapter X, is required to get himself registered under the Central Excise law.