TYPES & RATES OF THE EXCISE DUTIES

   
 

RATES OF EXCISE DUTY
The basic rate of excise duty is 14% while in some cases there is a special duty if 8% which makes the excise duty in those cases at 22%. There is at present a cess for education called education cess, which is 2% of the excise duty; therefore, the effective excise duty comes out as 14.42% or 22.66%.
 
DUTIES UNDER CENTRAL EXCISE ACT
Basic duty and special duty of excise are levied under Central Excise Act.

  • Basic excise duty to be termed as Cenvat - Basic excise duty (also termed as Cenvat as per section 2A of CEA added w.e.f. 12-5-2000) is levied at the rates specified in First Schedule to Central Excise Tariff Act, read with exemption notification, if any. [section 3(1)(a) of CEA]. 
     

  • Basic excise duty is levied u/s 3(1) of Central Excise Act. The section is termed as 'charging section'. The duty rate is generally 8% w.e.f. 24-2-2009 i.e. total 8.24% including education and SAH cess [earlier, it was 14% i.e. total 14.42%]. 
     

  • Education cess is payable @ 2% of the basic duty and Secondary and High Education Cess is 1% of basic excise duty.
     

  • Education Cess and SAH EDUCATION CESS on excise duty - If excise duty rate is 8%, education cess will be 0.16% and SAH Education cess will be 0.08%. A provisions of Central Excise Act, including those relating to refunds, exemptions and penalties will apply to education cess and SAH cess.
     

  • 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. [proviso to section 3(1)]. Note that even if rate of customs duty is considered for payment of duty, actually the duty paid by them is Central Excise Duty. The rate of customs duty is taken only as a measure. The EOU unit can sale part of their final products in India at 50% of customs duty or normal excise duty in certain cases. 
     

  • National Calamity contingent Duty 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. It varies from 10% to 45%. - - NCCD of 1% was imposed on PFY, motor cars, multi utility vehicles and two wheelers and NCCD of Rs 50 per ton was imposed on domestic crude oil, vide section 169 of Finance Act, 2003.
     

  • Duties under other Acts - Some duties and cesses 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 / cesses.
     

  • Duty on Medical and Toilet preparations - A duty of excise 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.
     

  • Cess - A cess has been imposed on certain products.