The Central Excise and Service Tax is levied on all individuals who are involved in the production, manufacture, and/or distribution of a trade. This tax is expected to be revised every year when the year’s budget is announced by the government.
Note: Service Tax has been replaced by the Goods and Services Tax (GST) starting 1 July 2017.
Taxes form the backbone for our nation to prosper and progress, heralding in a new era with support from dedicated taxpayers. Every government simplifies its taxation rules by categorizing taxes under broad avenues. Excise and Service Tax are two such headings through which the government aims to improve its revenue.
Definitions of Excise & Service Tax
- Excise Tax – Excise tax is an indirect tax levied on certain goods, encompassing their manufacture, sale and use in a particular setting. This tax is not directly applied by the government, with an intermediary acting on behalf of the government who collects and pays this to the relevant authority.
- Service Tax – There are certain services which we avail as residents of a particular nation and service tax is an indirect tax which is levied by a government. This tax is levied on service providers who offer these services to us, the general public. Traditionally, this tax is paid for by customers, with the providers passing this collected tax to the government.
Central Excise and Service Tax Rules
Excise Tax in India is governed by “The Central Excise Act of 1944” which lays down the procedure and framework for the department to enforce this rule. This Act is enforceable throughout the territory of India and accords power to relevant authorities to act under the provisions. The Central Board of Excise and Customs follows rules laid down under the Act, with these rules governing everything right from Appeals and Settlement of Cases to Valuation and Determination of sale price of goods. These rules have been framed with an intention to simplify tax collection and help relevant authorities during complicated situations.
Service Tax in India is implemented and governed under The Finance Act of 1994, and it is to be paid by everyone who offers a taxable service to the public. The Rules mentioned under this Act encompass the entire realm of service tax, offering detailed inputs right from the selection of staff to registration, payment, export and return of services, appeals and facilities available to taxpayers.
Central Excise and Service Tax Online Registration
Under the Central Excise Act of 1944, an individual who is involved in the production, manufacture and distribution of trade is required by law to be registered. This includes storing a particular good in a warehouse or private storage space.
With changing times, the Central Board of Excise and Customs has migrated to an online platform to help taxpayers find a solution for their problems, without having to physically go to an office. ACES or Automation of Central Excise and Service Tax is the brainchild of the board designed to bridge the gap between information providers and information seekers, offering efficiency, transparency and accountability when it comes to indirect tax administration in the country. ACES has helped individuals migrate from manual mode of tax filing and processing to an online mode, making it faster and simpler for everyone involved.
Online registration through ACES is pretty simple and straightforward, with individuals required to fill in some basic details like their names, communication address, name of unit/enterprise along with their designation and mobile number. This registration can be done through the official website of ACES.
Central Excise and Service Tax Online Payment
The government introduced an e-payment portal to simplify payment of excise and service taxes, with online payment being made mandatory from October 2014. Registered individuals and organisations can pay customs and service tax online, through the official website of ACES. A 15 digit Assessee Code is provided to registered users, which can be used to pay their taxes online. This code will help an individual determine his/her tax liability (Excise or Service Tax) and an assessee can pay this amount through online banking. For this, he/she should have a net-banking account. Once the tax is paid successfully, a challan containing CIN and payment details will be displayed.
Individuals should remember that this facility can be utilised only if their bank offers the facility for e-payment.
Central Excise and Service Tax Rates:
Central Excise and Service Tax rates are determined in the budget, with changes expected every year. The annual budget of 2015-2016 saw a change in old rates, with the Central Excise Duty jumping to 12.5% from 12.36%.
Service tax rates in India were also increased from 12% to 14%, with an additional 2% “Swachh Bharat Cess” in place.
Central Excise and Service Tax Implementation:
Central Excise and Service Tax are implemented through the Central Board of Excise and Customs, which falls under the Department of Revenue. The Ministry of Finance is in charge of overseeing this Board.
India has been divided into 23 zones with 93 Commissionerates implementing the rules and regulations, with a goal to simplify the entire process for the common man.