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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
socio-economic objectives.
Are
there 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 Duty?
Excise Duty is an indirect
tax levied and collected on the goods manufactured in
India.
Who
is 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, 1985.
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,
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