When is the Central Excise Day Celebrated? Central Excise Duty

Central Excise Day and Central Excise Duty

When is the Central Excise Day Celebrated? Central Excise Duty

When is Central Excise Day celebrated?

Central Excise Day is celebrated across India every year on February 24. The day is celebrated to honor the officers associated with the Central Board of Excise and Custom (CBEC) and their services. This day is celebrated to honor the service of CBEC to the country. This is done to inspire the officers to carry out their duties with utmost sincerity. The officers perform checking of corruption in products from the manufacturing sector every year. The day is celebrated to observe the legislation of the Central Excise and Salt act on 24 February 1944.

What is Central Excise Duty?

Central Excise Duty is an indirect tax imposed on products produced in India. The goods on which the Central Excise Tariff Act specifies that they are subject to the excise duty are excisable goods. But this act does not specify the word “Goods”. Consequently, its meaning is derived from the constitution and the Sales of Goods Act and is understood in accordance with the apex court. It is known that excise goods are movable, i.e. capable of being transported and marketable, i.e. capable of being sold.

By general definition, the Central Exercise Act describes ‘Manufacture’ as any process either incidental or ancillary to the completion of a manufactured item. Manufacturing under Central Excise can be defined as a method in which the name, characteristics, and use of the input are modified or become distinct and separate after the process. Therefore, a process that simply changes either the form or size of the same article or the value of the article getting enhanced would not constitute manufacture. Assembling would constitute manufacture, but the repairing or reconditioning does not constitute manufacture.

What are excise goods and goods liable to consumer tax?

Excise goods are as follows:

1. wine and intermediate products

2. other products containing alcohol

3. tobacco products

4. mineral oil

Goods liable to consumer tax are as follows:

1. mineral water and soft drinks

2. fruit and vegetable juices


Will GST replace excise duty?

Goods and Services Tax is often assumed to be a complete unification of all indirect taxes currently levied in India by Central and State governments, but the reality is a little different. Though it is true that most major indirect taxes will be subsumed under GST, there are still certain products on which the indirect taxes will not be covered.

Typically, this is when the taxes are either outside the purview of the GST constitutional amendment, or there is an agreement between Centre and States to defer their inclusion.

Following are the products which still carries the levy of excise post GST:

Tax on items containing alcohol 

Alcoholic beverages for human consumption have been kept out of the purview of GST as exclusion mandated by constitutional provision. Sales Tax/VAT has been continued to be levied on alcoholic beverages as per the existing practice. VAT is levied on alcohol purchases in some states, and there will be no objection to that. Excise duty, which is presently levied by the states, may also be unaffected.

Tax on Petroleum products

As for petroleum products, although the GST constitutional amendment provides for levying GST on these products, it allows the timeframe for their inclusion to be decided by the GST Council. Therefore, in the initial years of GST, petroleum products will remain out of the scope of GST.

The existing taxation system under VAT and the Central Excise Act will continue for both of the commodities listed above.

Excise duty after GST implementation

Post GST implementation, the following taxes have been replaced by GST at the Central level and State level:

At the Central level:

  • Service Tax
  • Additional Excise Duty
  • Central Excise Duty
  • Additional Customs Duty is commonly known as Countervailing Duty, and
  • Special Additional Duty of Customs

At the State level:

  • State Value Added Tax/Sales Tax
  • Entertainment Tax
  • Octroi and Entry tax,
  • Purchase Tax,
  • Luxury tax, and
  • Taxes on lottery, betting and gambling.
  • Fat tax imposed in Kerala

Excise duty is levied on the manufacture of goods and levied at the time of removal of goods. Whereas, GST is levied on the supply of goods and services. In GST, Excise duty has been replaced by Central GST as excise is levied by Central Government and revenue collection from CGST will also be of Central government.

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Point of differences between excise duty and GST

Point of difference Excise Duty Goods and Service Tax (GST)
Point of taxation At the time of removal of goods. At the time when the supply of goods and services materialize.
Tax base Levied on manufacture. Goods and Services Tax is levied from manufacture until the sale of goods to the customer. GST is levied on goods and services also.
Return filing To file monthly returns and an annual return before 30th April. Monthly or Quarterly returns have to be filled each month and the annual return has to be filled before 30th September.
Rate of taxes As per central excise tariff rules, the rates of excise duty and specified. Currently, the rate of excise is 12.36% and it varies according to the type of goods. Under GST, we have the following rates of taxes viz., 0%, 5%, 12%, 18%, and 28%.
Invoice matching No such concept and ITC is claimed on the basis of self-assessed return filed by the taxpayer. In GST, a credit will be given on the basis of invoice number matching.
Input Tax Credit In Excise, credit can be taken on the tax charged on input goods and goods. In GST also, credit can be taken of both goods and services. But the CGST credit cannot be adjusted against SGST credit and vice versa. IGST can be availed against IGST or CGST or SGST


State Excise duty under GST

Excise duty is usually a central levy, although not all levies are imposed by the center. Excise duty on the manufacture of few products, including liquor, is levied by state governments. Excise duty on beer, alcoholic preparations, and drugs is levied by the State Government and is referred to as State Excise duty. In most of the states, after sales taxes (state VAT) excise duty is the second largest tax revenue.

States cannot enforce different rates unless it is recommended by the GST Council. However, in the case of certain products like alcohol (except human consumption), alcoholic preparations, and drugs, the States have continued to levy existing taxes, such as VAT or State Excise duty over and above the GST.

Takshila learning celebrates Central Excise Day by creating awareness among the masses about the services rendered by the department. Takshila learning also educates the common people about the differences between different types of taxes and revenues and their applications on specific consumable goods.

Celebrate the day with Takshila Learning by paying a tribute to these nation builders on this Central Excise Day

Check another article on Days and Festivals


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February 13, 2021

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