Excise Duty is a type of indirect tax that was levied by the central government of India on the manufacture of goods within the country. Unlike customs duty, which is charged on imported goods, excise duty applied to goods produced domestically. It was traditionally collected from manufacturers at the time of production, making it an important source of revenue for the government.
Prior to the introduction of the Goods and Services Tax (GST) in July 2017, excise duty was a key component of India’s tax structure. However, after the rollout of GST, most goods that were earlier covered under excise duty are now taxed under the GST regime. That said, excise duty still applies to a limited category of products such as alcohol for human consumption, tobacco products, and petroleum fuels, which are currently outside the scope of GST.
For small business owners and manufacturers, understanding whether their product falls under the purview of excise duty is important for ensuring tax compliance. Manufacturers dealing in excisable goods must register with the central authorities, maintain production records, and pay the applicable duty before clearing goods from the factory.
Although GST has streamlined indirect taxation in India, businesses involved in the production or sale of excisable goods must still remain compliant with excise-related regulations. Non-compliance can lead to penalties, delays in product clearance, or legal complications.
To navigate income tax and indirect tax obligations efficiently, businesses can explore professional compliance solutions available at FinTax24, where expert support is tailored for evolving Indian tax laws.
In summary, while excise duty has largely been subsumed under GST, it still holds relevance in specific sectors and requires continued attention from affected businesses.