Excise duty on petrol and diesel hiked by Rs 3 a litre.
Excise duty:
- Excise duty refers to the taxes levied on the manufacture of goods within the country, as opposed to custom duty that is levied on goods coming from outside the country.
- The Central Board of Excise and Customs (CBEC) is responsible for collecting excise duty.
- The rates of Central Excise Duty are defined by the Central Excise Tariff Act, 1985.
- The Central Excise Act majorly provides the definitions related to excise while the Central Excise Tariff Act includes an elaborate schedule of excisable goods and the tariffs on them.
There are three types of excise duties in India:
- Basic Excise Duty (Central Value Added Tax (CENVAT): This type of excise duty is imposed on goods classified under the first schedule of the Central Excise Tariff Act, 1985.
- Additional Excise Duty: This duty is levied on goods listed in Schedule 1 of the given act.
- Special Excise Duty- This kind of duty is levied on special goods specified under the Second Schedule to the Central Excise Tariff Act, 1985.
What is the difference between excise duty and GST?
- The difference between excise duty and other indirect taxes is that excise duty is levied on the manufacture of goods and at the time of removal of goods from the factory, while GST or sales tax or VAT are levied on the supply of goods and services.
Note: In July 2017 the Centre introduced GST that subsumed a number of indirect taxes including excise duty. This means excise duty, technically, does not exist in India except on a few items such as liquor and petroleum.
- For the items and services outside the purview of GST, excise duty is a form of indirect tax which is generally collected by a retailer or an intermediary from its consumers and then paid to the government.
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