Central Excise Duty

Recently, the Indian Government has introduced an online portal to allow individuals to pay the central excise duty levied on them. All they have to do is log in using their assessee code, verify their credentials, and make the online payment.

Note: Entry Tax has been replaced by the Goods and Services Tax(GST) starting 1 July 2017


The prosperity of a nation lies in the prosperity of its citizens and one way in which both the nation and individual can grow together is through tax/duty. Duty paid by eligible people enable the government to use that money to further overall development, increasing opportunities for others, making sure that everyone gets a piece of the cake.

What is Central Excise Duty?

Goods are traditionally categorized based on their purpose and area of use, with certain goods meant to be produced and consumed locally. Goods and products which are manufactured and consumed within India have to pay an indirect tax to the government, with this tax being called Central Excise Duty. While the tax is paid by the manufacturer, the onus of additional payment for a product to account for this duty/tax falls on the consumer.

Excise duty can be levied only on certain products which are mentioned in the First and Second Schedule of the Central Excise Tariff Act, 1985 and other goods are not covered under the ambit of excise duty.

Central Excise Act:

Excise Duty in India has its roots in the British Era, when the ruling British taxed the production and manufacture of salt. Over the years the number of products under the ambit of this duty increased, until finally, in 1944 the Central Excise Act was passed. This Act forms the framework for Excise Duty implementation and collection in India, encompassing a wide range of possibilities, powers and duties of officers and relief available to concerned parties. The provisions under this Act are applicable throughout the entire territory of India.

The Government of India, in the year 1986 passed the Central Excise Tariff Act, 1985, providing provisions for tariff on Central Excise Duties. This Act contains a list of products and the duties associated with them.

Central Board of Excise and Customs:

The Ministry of Finance is the apex body in charge of maintaining financial rules and regulations in the country, and as such has the Department of Revenue under its ambit. The Central Board of Excise and Customs is a part of this Revenue Department and handles policies related to levying and collecting Customs and Central Excise Duties from relevant individuals. It also collects Service Tax apart from handling administration related to Narcotics, Customs, Service Tax and Central Excise.

Central Board of Excise and Customs also functions as an administrative authority to organizations like Custom Houses, Central Revenues Control Laboratory and Central and Service Tax Commissionerates, which are expected to report to it.

Central Excise Registration:

The Government of India, in a bid to simplify the entire Central Excise domain has developed an online portal to offer convenience to users. Automation of Central Excise and Service Tax or ACES as it is called is a one stop solution for everyone looking for a quick answer to their customs related queries. Individuals can register online, through this website by providing their basic information like name, contact details, company/manufacturer details, designation and name of a unit. Registration through this portal is quick, transparent and efficient, ensuring that a level of accountability is maintained throughout. On successful registration, an individual will be provided a 15 digit assessee code which he/she can use for further correspondence through the website.

ACES has ensured that the department is on par with modern technology, making for a seamless interaction between authorities and taxpayers, eliminating middle-men and heralding a new era of custom duty.

Central Excise E-Filing:

Individuals who need to pay customs duty can e-file their taxes online, through the ACES website. One needs to log onto the website and choose the e-filing tab, post which they are directed to a page wherein they can download forms related to custom duty payment. Post downloading they need to fill in these forms with the relevant data and use their registration ID to make the payment. The form contains details about their products, including the number of products produced apart from having financial information related to these products.

These forms are available in Excel Utilities and XML Schema format and are regularly updated, ensuring that taxpayers are up to date with latest developments before they e-file their returns.

Central Excise Payment:

The Government of India has introduced a facility for e-payment of excise duty through an online portal. Individuals can log onto this portal using their assessee code and will have to verify their credentials before proceeding to pay online. They will then have to select accounting codes for Excise Duty and make payments through net banking. It is compulsory for their banker to offer net banking facilities in order to successfully pay online and one should go through the list of banks which offer this service before choosing to pay online. On successful payment of excise duty, a challan containing payment details and CIN will be displayed to the individual.

Central Excise Rates:

Central Excise rates are determined by the Ministry of Finance, with rates changing during budgets. These rates are a reflection of economic trends in the country and are generally designed keeping in mind multiple requirements. Central Excise Duty rates were increased from 12.36% to 12.50% during the annual budget session of 2015-2016.

News About Central Excise Duty

  • Appeal to Jewellers to End Agitation

    The Central Excise Department has urged protesting gold jewellers to stop their agitation and accept the new proposal from the government that levies 1% excise duty on jewellery. Jewellers have been appealed to register with the department by 31st March as per the announcement made by FM Arun Jaitley in Budget 2016-17.

    The budget announcements included 1% excise duty with no input credit or 12.5% with input credit on jewelleries. Silver articles without any precious metal or stone additions are exempt from the excise duty while goldsmiths and artisans will also be kept away from the purview of the new proposal. Small scale industries with turnover not exceeding Rs.6 crore per year need not pay the excise duty. The government in expecting around 400 jewellers to fall into the small scale category though final figures will be ascertained only after the registration process is over.

    18 March 2016

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