All about Central Excise - Summary

What is excise duty?
An excise or excise tax (sometimes called an excise duty) is a type of tax charged on goods produced within the country (as opposed to customs duties, charged on goods from outside the country). It is a tax on the production or sale of a good. This tax is now known as the Central Value Added Tax (CENVAT).


The different types of Excise duty are as follows: -

• Basic Excise Duty (BED): This is the duty charged under section 3 of the Central Excises and Salt Act, 1944 on all excisable goods other than salt which are produced or manufactured in India.  Basic Excise Duty [also known as Central Value Added Tax (CENVAT)] is levied at the rates specified in Central Excise Tariff Act.
• Special Excise Duty (SED): As per the Section 37 of the Finance Act, 1978 Special excise Duty was attracted on all excisable goods on which there is a levy of Basic excise Duty under the Central Excises and Salt Act,1944. Special Excise Duty is levied at the rates specified in the Second Schedule to Central Excise Tariff Act, 1985.
• Education Cess on Excise Duty: Section 93 of Finance (No. 2) Act, 2004 states that education Cess is 'duty of excise', to be calculated on aggregate of all duties of excise including special excise duty or any other duty of excise, but excluding education Cess on excisable goods.
• Excise duty in case of clearances by EOU: The EOU units are expected to export all their production. However, if they clear their final product in DTA (domestic tariff area), the rate of excise duty will be equal to customs duty on like article if imported in India.
• National Calamity contingent Duty (NCCD): A 'National Calamity Contingent Duty' (NCCD) has been imposed vide section 136 of Finance Act, 2001 [clause 129 of Finance Bill, 2001, w.e.f. 1.3.2001]. This duty is imposed on pan masala, chewing tobacco and cigarettes.
• Duties under other Acts: Some duties and Cess are levied on manufactured products under other Acts. The administrative machinery of central excise is used to collect those taxes. Provisions of Central Excise Act and Rules have been made applicable for levy and collection of these duties / Cess.
• Additional Duty on Goods of Special Importance (AED [GSI]): Some goods of special importance are levied Additional Excise under Additional Duties of Excise (Goods of Special Importance) Act, 1957. The 'Additional Duty' is in addition to excise duty. This scheme was introduced based on the suggestion made by the manufacturers to Government, that multiple level taxes and duties should be avoided. Levy and collection of all taxes at one stage by single authority will be convenient for payment and administration. Hence, by agreement between Central and State Governments, it was decided to make a beginning in 1957, by selecting some items where additional duty will be collected instead of sales tax and such additional duty will be distributed among various States. Revenue from this duty is distributed among State Governments on the basis of percentages given in the second schedule to the Act.

• Some items covered are textile articles like cotton fabrics, silk and wool fabrics, man-made fibers, terry fabrics, metallised yarn, embroidery; sugar, branded tobacco, pan masala containing tobacco and cigarettes.

• Duty on Medical and Toilet Preparations: Excise duty is imposed on medical preparations under Medical and Toilet Preparations (Excise Duties) Act, 1955.
• Additional Duty on Mineral Products: Additional duty on mineral products (like motor spirit, kerosene, diesel and furnace oil) is payable under Mineral Products (Additional Duties of Excise and Customs) Act, 1958.
• Additional Customs Duty commonly known as countervailing Duty (CVD): Countervailing duty (CVD) is imposed on the Imports.
• Special Additional Duty of Customs (Special CVD): Special CVD is being imposed on items bound under the Information Technology Agreement (except information technology software), and also on specified inputs/raw materials for manufacture of electronics/IT goods.
• Additional Duties of Excise (Textiles and Textile Articles) [AED (TTA)]
• Additional Duty of Excise (Tea and Tea Waste) [AED (TTW)]
• Secondary and Higher Education Cess
  
  
  
  
  What are the various returns I can file online?
  The various types of returns that can be filed online are as follows :-
  

  Type of Return	Periodicity	Due Date For Filing	Who Can File
  ER-1	Monthly	10th	Manufacturers of Central Excise, other than those who are required or entitled to file ER-2 or ER-3 returns
  ER-2	Monthly	10th	Manufacturers who are 100% EOUs(Export Oriented Units) and are removing goods into the domestic tariff area
  ER-3	Quaterly	20th of completed quarter	Manufacturers availing exemption on the basis of value of their annual clearance, manufacturer of processed yarn, unprocessed fabrics falling under chapters 50 through 55,58 or 60 of the Central Excise Tariff or manufacturers of readymade garments.
  ER-4	Yearly	30th November	Annual Financial information statement to be submitted by manufacturers who paid duty of excise more than Rs.One crore in the preceding financial year.
  ER-5	Yearly	30th April	Annual return of information relating to principal inputs used in the manufacture of finished goods. Filed by manufacturers who paid duty of excise more than Rs. One crore in the preceding financial year
  ER-6	Monthly	10th	Monthly return of information relating to principal inputs on which cenvat credit was availed. Filed by manufacturers who paid duty of excise in excess of Rs.One crore in the preceding financial year.
  Dealer	Quaterly	15th of month succeeding completed quarter	Filed by registered first stage and second stage dealers giving details of the invoices issued by them and documents based on which credit passed on.