Shivani Shah & Associates

Central Excise Duty is levied on a manufacturer or producer in respect of the commodities produced or manufactured by it, with intention to sell or proceed to sale of those particular goods. The department of revenue of the ministry of finance exercises control in matters relating to all indirect taxes through statutory board named the Central Board of Excise and Customs [CBEC]. The board was constituted under The Central Board of Revenue Act 1963, and Central Board of Direct Tax [CBDT] is also constituted under this act. Central Excise Duty is levied on certain goods for their production or sale catering or on licenses on specific services and activities. Excise duty is an inland tax unlike custom duties is an inland tax. Also this duty charges are a form of Indirect Tax. Indirect taxes are generally collected by a retail store or an intermediary body from the person who ultimately bears the responsibility of paying the tax as a consumer. The producer of the goods then pays this tax to the government. This amount is excise of the VAT (Value Added Tax) and sales tax that is charged to the consumers when purchasing a good.

The excise duty falls under the Central Excise Duty Act, 1944. The state government charges them on certain goods such as narcotics, alcohol and alcoholic products; the duty charges on other goods are collected by the central government, hence the term Central Excise Duty. The tax is, however, collected by the government when the goods are being removed from the factory and dispatch.