How & When to Pay Excise Duty in India & its Types ?

Excise Duty

The charges/ tax which is applicable to the manufacturer of the goods within the country is known as excise duty. The excise duty is exactly opposite to the customs duties which means the taxes are charged on the goods which are exporting from the countries outside.

It is to be noted that, including the excise, many indirect taxes also subsumed in the GST. As per this, in India excise duty does not exist technically but it applies on some items such as petroleum and liquor. Basically, this is the indirect tax that is collected by the retailers and they will pay it to the government once collected from the consumers. CBEC (Central Board of Excise and customs) takes complete responsibility for collecting the excise duty.

Imposing the actual sale of the excise duty on goods is not mandatory as on the manufacture of the goods only it is imposed.

Excise Duty Types-

As per the laws, there are three types of Excise Duties which are-

  • Special Excise Duty
  • Basic Excise Duty
  • Additional Excise Duty

Special Excise Duty-

To the central Excise Tariff Act, 1985, the special goods which are under the second schedule, the Special Excise Duty is charged/ levied.

Basic Excise Duty-

This Basic Excise Duty is also said as CENVAT (Central Value Added Tax). Under the Central Excise Tariff Act, 1985 first schedule, this excise duty is levied on the goods.

Additional Excise Duty-

The Additional Excise duty is charged on the goods which are listed in schedule 1 of the Additional Duties of Excise Act, 1957. This duty is charged by the state and the central government as a substitute for sales tax.

Excise Duty Rules and Acts-

Two acts are under this excise duty which are-

  1. Central Excise Tariff Act, 1985
  2. Central Excise Act, 1944

This Central Excise tariff Act, 1985 will only take care of the rates of the central excise duty. CBEC works under the leadership of the Finance minister, administers the custom laws.

Who needs to pay Excise Duty?

The manufacturer of the goods will be charged with excise duty on the manufacture of the goods which have to pay it to the government. There are three parties to pay the excise duty as per the law-

  • Individuals who got manufactured goods from the other parties.
  • Individuals who manufactured the goods in question.
  • The individual who got the goods which are manufactured by the hiring labor.

When to pay Excise Duty? –

Excise duty in India is applicable to the manufacture of the goods and has to pay when these goods are removed. On the production of the manufacture of the goods, only this excise duty is applicable. The tax is not levied on the removal of the goods.

The Procedure for paying Excise Duty in India-

EASIEST (Electronic Accounting System in Excise and Service Tax) is having the CBEC payment gateway method of net banking to pay the tax. Complete details of payment by step by step procedure of paying excise duty.

cbic excise duty

  • Select e-payment.
  • 15 digit assessee codes have to be entered. This code will be allotted by the jurisdictional Commissioner.
  • Asking details have to fill.
  • Accounting codes for excise has to select from the Tax-type menu.
  • Once you selecting the accounting code, an individual has to select the bank from which they are making their payment.
  • Before paying the bill, once recheck the details you have given are correct or not. Proceed to the payment procedure once satisfied with the filled in details.
  • By providing your user ID and password open the net banking portal. Pay the amount which has to pay for the tax.
  • A challan counterfoil is generated after the successful payment of the tax. This challan contains CIN Challan Identification Number. You have to keep it safe with you for future uses.
  • Finally, once the payment is done on the EASIEST, verification has to be done by using the Challan status inquiry.

Know the difference between the Custom Duty and the Excise Duty in India-.

Customs duty is applicable for the goods which are sold in India but those products were produced in the different countries and are paid by the importer of the goods. Whereas Excise duty is applicable for the goods manufactured/produced within the country and it is paid by the manufacturer of the goods but not by the consumer.

Common FAQs on Excise duty-

  • GST has subsumed excise duty?

GST has been subsumed by the excise duty along with the other indirect taxes also. Still on some items like liquor and petroleum excise duty is applicable.

  • Where to pay this Excise duty?

By using the cbec-easiest.gov.in and selecting the e-payment you can make excise duty payment.

  • How many types of excise duties charged in India?

Three types of excise duties charged in India which is Additional excise duty, Special excise duty, and Basic excise duty.

  • What if anyone not interested in paying the excise duty?

Individual who does not agree for the payment of excise duty, need to pay the penalty. This penalty ranges from 25-50% of the evaded duty.