What is Excise Duty and how do you get a Refund of central excise duty after GST?
Excise duty represents tax levied upon the production, licensing, and sale of goods. It is classified as an indirect tax remitted by producers of goods to the Government of India. Unlike Customs duty, which pertains to goods imported into the country, excise duty is specifically applicable to goods manufactured domestically within the nation's borders.
The term 'excisable goods' in India pertains to goods that are explicitly listed in both the first schedule and the second schedule of the Central Excise Tariff Act, 1985, and are thereby subjected to a duty of excise. This definition also encompasses products falling under the category of salt, thus encompassing a comprehensive range of goods eligible for excise duty assessment.
In previous times, excise duty was levied as Central Excise Duty. There has however been a change after 2017 in the tax and rebate system as the GST was introduced and as of today, excise duty is charged on petroleum and liquor only.
Types of Excise Duty
Excise duty is of 3 types there are as follows
Basic Excise Duty in India is imposed on all excisable goods, except for salt, produced or manufactured within the country, as prescribed by section 3 of the 'Central Excises and Salt Act' of 1944. The applicable rates are specified in the schedule of the Central Excise Tariff Act of 1985.
Additional Excise Duty, as defined by the 'Additional Duties of Excise Act' of 1957 (Section 3), allows for the imposition and collection of excise duty on specific goods listed in the act's schedule. This duty is divided between the central and state governments and takes the place of the sales tax.
Special Excise Duty is levied on all excisable goods subject to taxation, similar to the Basic Excise Duty under the 'Central Excises and Salt Act' of 1944, as per Section 37 of the Finance Act of 1978. The applicability of Special Excise Duty for each fiscal year is determined and announced by the Finance Act. Consequently, the decision on whether to charge and collect the Special Excise Duty during the relevant financial year is explicitly stated in the Act.
Refund of central excise duty after GST
When it came to the central excise duty and tax rebate and refund process, there were several changes after the introduction of GST. The concept of central excise duty ceased to exist as a separate tax. Central excise duty was subsumed into the GST regime, and therefore, there is no specific refund process for central excise duty after GST.
Under the GST system in India, taxes are classified into three main categories: CGST (Central Goods and Services Tax), SGST (State Goods and Services Tax), and IGST (Integrated Goods and Services Tax). These taxes are applicable based on the type of supply (intra-state or inter-state) and replace various indirect taxes, including central excise duty.
The refund of central excise duty after GST ceases to exist as post the introduction of GST in India in 2017, the tax refund process has been altered doing away with the entire Central Excise Duty. The GST refund process has its own set of procedures which is unlike that of the Central Excise Duty refund.