Assessment Year 2009-10
- Excise duty rate on items currently attracting 4% to be raised
to 8% with following major exceptions:
- Specified food items including biscuits, sharbats, cakes and
- Drugs and pharmaceutical products falling under Chapter 30
- Medical equipment
- Certain varieties of paper, paperboard and articles thereof
- Power driven pumps for handling water
- Footwear of RSP exceeding Rs.250 but not exceeding Rs.750 per
- Pressure cookers
- Vacuum and gas filled bulbs of RSP not exceeding Rs.20 per
- Compact Fluorescent Lamps
- Cars for physically handicapped
- Specific component of excise duty applicable to large
cars/utility vehicles of engine capacity 2000 cc and above to be
reduced from Rs. 20,000/- per vehicle to Rs.15,000 per vehicle.
- Excise duty on petrol driven trucks/lorries to be reduced from
20% to 8%. Excise duty on chassis of such trucks/lorries to be
reduced from 20%
- Excise duty on Special Boiling Point spirits to be reduced to
- Excise duty on naphtha to be reduced to 14%.
- Duty paid High Speed Diesel blended with upto 20% bio-diesel to
be fully exempted from excise duties.
- The ad valorem component of excise duty of 6% on petrol intended
for sale with a brand name to be converted into a specific rate.
Consequently, such petrol would now attract total excise duty of
Rs.14.50 per litre instead of 6% + Rs.13 per litre.
- The ad valorem component of excise duty of 6% on diesel intended
for sale with a brand name to be converted into a specific rate.
Consequently, such diesel would now attract total excise duty of
Rs.4.75 per litre instead of 6% + Rs.3.25 per
- Excise duty on manmade fibre and yarn to be increased from 4% to
- Excise duty on PTA and DMT to be increased from 4% to 8%.
- Excise duty on polyester chips to be increased from 4% to 8%.
- Excise duty on acrylonitrile to be increased from 4% to 8%.
- The scheme of optional excise duty of 4% for pure cotton to be
- Excise duty for man-made and natural fibres other than pure
cotton, beyond the fibre and yarn stage, to be increased from 4% to
8% under the existing optional scheme.
- An optional excise duty exemption to be provided to tops of
manmade fibre manufactured from duty paid tow at par with tops
manufactured from duty paid staple fibre.
- Suitable adjustments to be made in the rates of duty applicable
to DTA clearances of textile goods made by Export Oriented Units
using indigenous raw materials/ inputs for manufacture of such
- Full exemption from excise duty to be provided on goods of
Chapter 68 of Central Excise Tariff manufactured at the site of
construction for use in construction work at such site.
- Excise duty exemption on recorded smart cards
and recorded proximity cards and tags
to be made optional. Manufacturers have the option to pay the
applicable excise duty and avail the credit of duty paid on inputs.
- EVA compound manufactured on job work for further use in
manufacture of footwear to be exempted from excise duty.
- Benefit of SSI exemption scheme to be extended to printed
laminated rolls bearing the brand name of others by excluding this
item from the purview of the brand name restriction.
- On packaged or canned software, excise duty exemption to be
provided on the portion of the value which represents the
consideration for transfer of the right to use such software,
subject to specified conditions.
- Excise duty on branded articles of jewellery to be reduced from
2% to Nil.
The Customs Act was formulated in 1962 to prevent illegal imports and
exports of goods. Besides, all imports are sought to be subject to a duty
with a view to affording protection to indigenous industries as well as to
keep the imports to the minimum in the interests of securing the exchange
rate of Indian currency.
Duties of customs are levied on goods imported or exported from India at
the rate specified under the customs Tariff Act, 1975 as amended from time
to time or any other law for the time being in force. For the purpose of
exercising proper surveillance over imports and exports, the Central
Government has the power to notify the ports and airports for the unloading
of the imported goods and loading of the exported goods, the places for
clearance of goods imported or to be exported, the routes by which above
goods may pass by land or inland water into or out of Indian and the ports
which alone shall be coastal ports
In order to give a broad guide as to classification of goods for the
purpose of duty liability, the central Board of Excises Customs (CBEC) bring
out periodically a book called the "Indian Customs Tariff Guide"
which contains various tariff rulings issued by the CBEC. The Act also
contains detailed provisions for warehousing of the imported goods and
manufacture of goods is also possible in the warehouses.
For a person who do not actually import or export goods customs has
relevance in so far as they bring any baggage from abroad.
Importance of Central Excise Duty
Central excise revenue is the biggest single source of revenue for the
Government of India. The Union Government tries to achieve different
socio-economic objectives by making suitable adjustments in the scope and
quantum of levy of Central Excise duty. The scheme of Central Excise levy is
suitably adapted and modified to serve different purposes of price control,
sufficient supply of essential commodities, industrial growth, promotion of
small scale industries and like Authority for collecting the Central Excise
Article 265 of the Constitution of India has laid down that both levy and
collection of taxes shall be under the authority of law. The excise duty is
levied in pursuance of Entry 45 of the Central List in Government of India
Act,1935 as adopted by entry 84 of List I of the seventh Schedule of the
Constitution of India. Charging section is Section 3 of the Central Excises
and Salt Act,1944.
Liability to pay Central Excise Duty
Section 3 of the Central excises and Salt Act,1944 provides that there
shall be levied and collected in such manner as may be prescribed, duties of
excise on all excisable goods other than salt which are produced or
manufactured in India at the rates set forth in the schedule to the Central
excise Tariff Act,1985.it is therefore clear that as soon as the goods in
question are produced or manufactured, they will be liable to payment of
Excise duty. However for convenience duty is collected at the time of
removal of the goods. While Section 3 of the Central Excises and salt
Act,1944 lays down the taxable event, Rules 9 and 49 of the Central excise
Rules,1944 provides for the collection of duty.