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What is Union Excise Duty?

FE Knowledge Desk
Union Excise Duty meaning, what does excise duty mean, how does excise duty work

Union Excise Duty meaning: This is a duty on manufactured goods, which is levied at the time of manufacture. Wondering as to what does excise duty mean? More importantly, how does excise duty work? A part of indirect tax, excise duty is a levy on particular goods and is collected at the point of manufacture, but ultimately, the burden is passed on to the consumer. The importance of excise duty is also clear from how it impacts the consumer.

Who takes the burden of excise duty in India?

The manufacturer, who pays the levy to the government, adds the tax component to the price of the goods to recover it from the eventual buyer of goods, who ends up paying the higher price.

What is the difference between excise duty and GST?

Excise duty is imposed in addition to an indirect tax such as goods & services tax (GST), sales tax or value-added tax (VAT). The difference between excise duty and other indirect taxes is that excise duty is levied on the manufacture of goods and at the time of removal of goods from the factory, while GST or sales tax or VAT are levied on the supply of goods and services.

Union Excise Duty: How to claim the input tax credit?

Unlike GST, there is no such concept of invoice matching and a taxpayer may claim an input tax credit on the tax charged on the basis of a self-assessed return filed by him/her.

Union Excise Duty: When to file the return?

A taxpayer has to file monthly returns and the due date of filing of the annual return under excise duty is April 30.

Union Excise Duty: How much is the rate of excise duty?

The excise duty rates are specified according to central excise tariff rules, and currently, the rate of excise duty is 12.36 per cent, which varies according to the type of goods.

Who has the authority to impose excise duty in India?

Although excise duty in India is predominantly a central levy, the duty on production of some items like alcohol, alcoholic preparations, and narcotic substances is imposed and collected by state governments. For most of these states, this is the second largest tax revenue after sales taxes/state VAT.