- What is tax ?
Tax is nothing but money that people have
to pay the Government, which is used to provide public services.
What is the
objective of tax collections?
Though the collection of tax is to augment
as much revenue as possible to the Government to provide public
services, over the years it has been used as an instrument of fiscal
policy to stimulate economic growth. Thus it is one of the
different types of taxes?
Yes, there are. Some taxes are direct and
others are indirect. Under our constitution, while the Central
Government is vested with the powers of levy and collection of certain
taxes, the State Governments are empowered to levy and collect certain
other type of taxes.
What are direct
and indirect taxes?
If the taxpayer bears its incidence and is
not able to pass on the burden, such tax is direct tax. Example: -
Income Tax, Wealth Tax, Gift Tax etc. If the taxpayer is just a conduit
and every stage the tax-incidence is passed on till it finally reaches
the consumer, who really bear the brunt of it, such tax is indirect tax.
Example: - Excise Duty, Customs Duty, Sales Tax etc.
What is Excise
Excise Duty is an indirect tax levied and
collected on the goods manufactured in India.
responsible to pay such duty to the Government? What are the relevant
enactments governing levy and collection of central excise duty?
Generally, manufacturer of goods is
responsible to pay duty to the Government. This indirect taxation is
administered through an enactment of the Central Government viz., The
Central Excise Act, 1944 and connected Rules - which provide for levy,
collection and connected procedures. The rates at which the excise duty
is to be collected are stipulated in the Central Excise Tariff Act,
Is it mandatory
to pay duty on all goods manufactured?
Yes, it is mandatory to pay duty on all
goods manufactured, unless exempted. For example, duty is not payable on
the goods exported out of India. Similarly exemption from payment of
duty is available, based on conditions such as kind of raw materials
used, value of turnover (clearances) in a financial year, type of
process employed etc.
Which organ of
the Central Government is entrusted with the collection of Central
Excise Duty? What are the other responsibilities entrusted with the
Central Government Department?
The Central Excise Department spread over
the entire country administers and collects the central excise duty. The
apex body that is responsible for the policy and formulation of
connected rules is the Central Board of Excise and Customs
which functions under the control of the Union Finance Ministry.
There are about 60,000 staff and officers including 1500 officers in
Group A level and 5,000 officers in Group B level in the Department. The
Central Excise officers are also entrusted with the administration and
collection of Service tax, Additional Excise Duty in lieu of sales tax
on goods of special importance and Additional Excise Duty on textiles
and articles of textiles, etc. and the Customs duty. The Central Excise
officers are also armed with NDPS Act in the suppression of illicit
trafficking in narcotic drugs and psychotropic substances. They are also
entrusted with the task of enforcing various allied enactments like the
Foreign Trade Regulation Act, the Foreign Exchange Regulation (now
Management) Act, the COFEPOSA Act,