Union Budget 2019: What is Excise Duty | Excise Duty Meaning and Definition

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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.

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.

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.

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. The CBEC, which functions under the leadership of the Finance Minister, administers the levy of excise and custom laws in the country.

There are three types of excise duties in India:

Basic Excise Duty- Sometimes referred to as 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. This duty is imposed under Section 3(1) (a) of the Central Excise Act, 1944 and levied on all excisable goods in the country except salt.

Additional Excise Duty- According to the Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, this duty is levied on goods listed in Schedule 1 of the given act. Such duty is levied on some specific goods and is charged by the central and state government as a substitute of the sales tax. The Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 also provide for a similar legislation.

Special Excise Duty- This kind of duty is levied on special goods specified under the Second Schedule to the Central Excise Tariff Act, 1985.