About Excise Duty
Central Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the goods are manufactured. It is a tax on manufacturing, which is paid by a manufacturer, who passes its incidence on to the customers.
The term "excisable goods" means the goods which are specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 , as being subject to a duty of excise and includes salt.
The term "manufacture" includes any process,
1. Incidental or ancillary to the completion of a manufactured product and
2. Which is specified in relation to any goods in the Section or Chapter Notes of the First Schedule to theCentral Excise Tariff Act, 1985 as amounting to manufacture or
3. Which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labeling or re-labeling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer.
As incidence of excise duty arises on production or manufacture of goods, the law does not require the sale of goods from place of manufacture, as a mandatory requirement. Normally, duty is payable on 'removal' of goods. The Central Excise Rules provide that every person who produces or manufactures any 'excisable goods', or who stores such goods in a warehouse, shall pay the duty livable on such goods in the manner provided in rules or under any other law. No excisable goods, on which any duty is payable, shall be 'removed' without payment of duty from any place, where they are produced or manufactured, or from a warehouse, unless otherwise provided. The word 'removal' cannot be necessarily equated with sale.
The removal may be for Sale
• Transfer to depot etc.
• Captive consumption
• Transfer to another unit
• Free distribution
Thus, it can be seen that duty becomes payable irrespective of whether the removal is for sale or for some other purpose.
Central Excise Registration
Any person or undertaking liable to pay Central Excise must obtain a Central Excise Registration. The Central Excise Registration number is a fifteen digit number in which the 1st ten digits are the PAN Number, the next two digits correspond with the applicant status and the last three digits denote the number of premises. Separate Central Excise Registration is required for each of the manufacturing premises. Once a Central Excise Registration is completed, the registration is valid unless it is is suspended, revoked or surrendered.
Non Registration Attracts Penal Consequences-
In case a manufacturer or producer liable to pay Central Excise does not obtain Central Excise Registration, a penalty of upto Rs.10,000 and/or imprisonment of upto 7 years can be imposed. Therefore, it is important for Entrepreneurs involved in manufacturing or production to know about their Central Excise liability and maintain compliance.
Central Excise REGISTRATION Exemption
Central Excise Law applies to all manufacturers and producers. However, the following persons are not required to register for Central Excise or pay Central Excise duty:
• Persons manufacturing good or products that are fully exempt from central excise or have 0% rate of excise duty by way of notification.
• Small Scale Industry whose aggregate turnover in a financial year does not exceed Rs. One Crore and Fifty lakhs.
• A person involved in wholesale trade of excisable goods or products.
• A person using excisable good or products for any other purpose other than for processing or manufacturing of goods.
• Person manufacturing excisable goods under the warehousing procedures of Customs Act, 1962.
Procedure of obtaining registration
The application for registration is to be filed with the Superintendent of Central Excise having jurisdiction over the premises in respect whereof the registration is to be obtained. The following documents are to be submitted for obtaining the registration
• Possession letter/allotment letter/rent deed of the premises to be registered;
• Article of Association of the company or Partnership deed of the firm, as the case may be;
• List of items with their Tariff sub-headings proposed to be manufactured; list of items with their Tariff sub-headings, if any, obtained, under Chapter X procedure or dealt within;
• Registration certificate issued under Shop and Establishment Act and PAN Number;
• Duly filled in application in the form R-I in triplicate;
• Grounds plan of the premises in duplicate including details of plant & machinery etc.;
• Details of the proprietors/all partners/Directors of the company including
2.Address - Official/ residential.
The application for registration in form R-I is either to be signed before the Superintendent of Central Excise or can be submitted duly attested and not arise by the notary public
Grant of registration
After receipt of application for registration, the jurisdictional Superintendent is to grant registration within 30 days of the receipt of the application. Even if the registration is not granted, it will be deemed to have been granted. The registration is in respect of premises and not a person.
Stage of filing application for registration.
For the goods that attract Central Excise duty right from the beginning, the registration is to be applied for before the removal of the goods. These goods are not covered under Small-Scale Exemption notification. Even where a manufacture of goods eligible for Small-Scale exemption opts for availment of Modvat credit, the registration is to be applied for before the removal of the goods.
Manufacturers of Cosmetics and Refrigeration goods are to apply for registration after crossing the clearances of Rs. 30 lakhs.
Manufacturers of other goods are to apply for registration when the clearances exceed Rs. 50 lakhs.
Validity of registration certificate.
A registration certificate is valid till the relevant unit is engaged in manufacturing of excisable goods. The registration certificate is not required to be renewed.
Transferability of registration certificate.
Registration certificate is not transferable. When a registered person transfers his business to another person, the transferee has to obtain a fresh registration.
Requirement of amendment in registration certificate.
When a registered firm or a company or association of persons undergoes a change in Constitution, the jurisdictional Range Officer is to be intimated within 30 days of such a change for incorporation of this fact in the registration certificate.
In case a registered person desires to manufacture a new product, he is to get the product endorsed on his registration certificate.
Requirement of exhibition of registration certificate.
Every registered person is required to exhibit the registration certificate or a certified copy thereof in a conspicuous part of the registered premises.
Whether 100% export oriented unit or unit in free trade zone is required to be registered.
A 100% Export Oriented Unit or a unit in Free Trade Zone licensed or appointed under the provisions of Customs Act, 1962, is deemed to be registered under the Central Excise law.
Surrender of registration certificate
When the registered person ceases to carry out the operation for which he is registered, he is required to surrender his registration certificate immediately to the Range Officer.
How to obtain duplicate registration certificate
In case the original registration certificate is lost or destroyed, the assessed can apply for a duplicate registration certificate to the jurisdictional Range Superintendent after depositing a fee of Rs.30/- through a TR-6 challan in any nominated branch of Punjab National Bank.
Documents For Registration
1. PAN card copy of the company/firm.
2. Address Proof of Business Premises of the company/firm (Electricity Bill / Phone Bill / Gas Bill).
3. Ground plan of factory (which should also provide description of boundaries of premises to be registered).
4. Details of Property Holding Rights of the registrant (if not self owned then Rent Agreement).
5. If Business Premises and Head Office of the company is different then Address Proof of Head Office also.
6. PAN card copy of authorized signatory.
7. Details of all banks with Bank Statement of last 2 months.
8. Certificates of
• Customs Registration No.(BIN)
• Import Export Code
• State Sales Tax No.
• CST No.
• Company Index No.
9. MOA,AOA,certifaicate of incorporation, partnership deed
10. Board resolution authorising application
(All the documents required self attestation)
Excise Duty Payment Due Date And Late Fee
Each Registered Dealer Is Requird To Pay Excise Duty On Monthly Basis .
E.G 6th Day Of The Following Month.( E.G. April Month Due Date Is 6th May)
Late Payment Will Be Charged With 1.5% Per Month Rate Of Interest.
Every dealer or manufacturer having excise control code (registration no) is required to file the return matching to his profile.
|Type of Return||Periodicity||Due Date For Filing||Who Can File|
|ER-1||Monthly||10th||Manufacturers of Central Excise, other than those who are required or entitled to file ER-2 or ER-3 returns|
|ER-2||Monthly||10th||Manufacturers who are 100% EOUs(Export Oriented Units) and are removing goods into the domestic tariff area|
|ER-3>For Small Scale Industries And Dealer||Quarterly||20th of completed quarter||Manufacturers availing exemption on the basis of value of their annual clearance, manufacturer of processed yarn, unprocessed fabrics falling under chapters 50 through 55,58 or 60 of the Central Excise Tariff or manufacturers of readymade garments|
|ER-4||Yearly||30th November||Annual Financial information statement to be submitted by manufacturers who paid duty of excise more than Rs. One core in the preceding financial year.|
|ER-5||Yearly||30th April||Annual return of information relating to principal inputs used in the manufacture of finished goods. Filed by manufacturers who paid duty of excise more than Rs. One crore in the preceding financial year|
|ER-6||Monthly||10th||Monthly return of information relating to principal inputs on which cenvat credit was availed. Filed by manufacturers who paid duty of excise in excess of Rs.One crore in the preceding financial year.|
|Dealer||Quarterly||15th of month succeeding completed quarter||Filed by registered first stage and second stage dealers giving details of the invoices issued by them and documents based on which credit passed on.|
|ST-3||Half Yearly||25th April/25th October||Filed by Service Tax assesses|