Central Excise Duty was a form of indirect tax levied by the Central Government of India on the manufacture of goods within the country. It applied to goods produced or manufactured in India and was collected at the time of removal of goods from the factory or production site. The tax burden was typically passed on to the final consumer, making it part of the product's sale price.
Although the Central Excise Duty played a key role in the Indian tax system for decades, it has largely been subsumed under the Goods and Services Tax (GST) since July 1, 2017. However, it is still applicable on a few specific items such as petroleum products, tobacco, and liquor, which fall outside the GST regime. The duty is governed under the Central Excise Act, 1944, and administered by the Central Board of Indirect Taxes and Customs (CBIC).
For businesses involved in the production or manufacturing of excisable goods not covered under GST, it remains crucial to stay compliant with excise registration, monthly filings, and duty payment regulations. Non-compliance can lead to penalties and disruptions in operations.
Understanding Central Excise Duty is essential for manufacturers and startups dealing in excluded goods, as it influences pricing, tax planning, and compliance strategies. If your business falls into a category that still attracts this duty, consulting with tax experts or platforms like FinTax24 can help ensure proper compliance and documentation.
In summary, while Central Excise Duty is no longer a general tax due to the implementation of GST, it remains relevant in specific industries. Business owners should be aware of its scope and continue to meet their legal obligations where applicable.