FAQ’s on Excise & its Registration

FAQ’s on Excise & its Registration

Q1: What is Excise Duty?

Excise duty is a tax which is charged on Manufacturer / Production of goods as well as from Importers of some specified Goods. Excise Duty is generally recognized as:-

• Central Excise: – This is the duty which is collected by central Govt.
• State Excise:- This is collected by Specific state in which the business is located
• Additional Duties on Import:- This is the duty which is collected on import of those items on which Excise is collected if that product was manufactured in India instead of importing it.
• This duty is in kind of compensatory duty which is collected to compensate the revenue loss caused by import of those goods.

The Central Excise Law & Procedures essentially embody Central Excise Act, 1944, Central Excise Rules, 2002, Cenvat Credit Rules 2004, Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008, Central Excise (Compounding of Offenses) Rules, 2005, Central Excise (Appeals) Rules, 2001, CESTAT (Procedure) Rules, 1982 and Notifications issued under Central Excise Act, 1944 and the Rules made thereunder.

Q2: Who need to apply for Excise?

Every person who produces or manufactures excisable goods will have to register themselves with Excise Department.

Persons Requiring Registration under Excise Dept. 

The accompanying classifications of persons oblige enrollment:

• Every Manufacturer if dutiable excisable products.
• First and second stage merchants (counting maker’s stops and shippers) wanting to issue Cenvatable receipts.
• Persons holding distribution centers for putting away non-obligation paid products.
• A Persons who acquire excisable products for profiting end-use based exception.
• Exporter-producers under refund/ security method; Export Oriented Units and EPZ units which have connection with the residential economy

Every Business which is planning to start a manufacturing unit or planning to import any item from abroad ,need to consult about the excise duty implication on that particulars product.

Exemption for Small Scale Industry

• Considering the importance and for its promotion small scale industries are exempted from paying of excise duty.
• Any Manufacturing unit which has a turnover of less than 1.5 Cr is exempt from payment of Excise duty.

It is always advisable to be certain about the tax implication and its compliance.

Separate enlistment is needed in admiration of divided premises (production line, warehouse, godown and so forth.) aside from in situations where two or more premises are really piece of the same plant (where procedures are between interfaced) yet are isolated by open street, channel or track line.

On account of materials, a solitary enlistment will accomplish for all premises recorded in that,Further, a few producers owning apparatus, (for example, force looms) under a typical shed or in as something to be shared premises will be dealt with as a different manufacturing plant each for their particular hardware and there will be no clubbing of their generation/freedom.

For Example the If you want to set a manufacturing plant confirm the duty liability under Central as well as State Excise well in advance before starting the activity.

Factor Excise tax before you start a manufacturing unit.

As mentioned above it is utmost important to factor the excise tax impact due to:-

• Decision on cost of final product
• The Decision on selling price of product
• Decision on Manufacturing or Import

Q3 When Excise is chargeable?

• Excise is an event based taxes, and taxes is charged once goods are exit from gate of manufacturing plant. The invoice is made on gate pass basis

Q4 What is the Type of Excise registration?

Type of Excise Registration

TYPES OF EXCISE REGISTRATION  :
Single Premises: Single Registration is required in case of one premises	More than Single Premises: If the person has more than one premises requiring registration, separate registration certificate shall be obtained for each of such premises.

What are the Documents & Process required for Excise registration?

Documents Required for Excise Registration	Excise Registration Procedure
Filled Form A-1 (2 Copies) PAN No. Constitution of Applicant Ground Plan for Factory Premises Detail of Manufacturing Process Tariff Classification Code Board Resolution(In Case of Company)	Step_1: Excise Registration Application to AC/DC [FormA-1(2 copies) and PAN No.]Step 2: AC/DC will grant Excise Registration Certificate after receipt of application and all documents and due verification premises.

Excise Compliance :

Q 5 What is the compliance under Excise?

All the compliance can be divided in two steps:-

• Payment of Taxes
• Filing of Return on 10th of next month.

Q 6 What is the rate of Central Excise duty?

Rate of Excise duty is depend on Product to product which is decided as per Central Excise Tariff which is notified and updated each year in Finance Act, the same can be found in.

Every Person who is registered with Excise has to file Periodic Return on timely basis. There are various types of return as mentioned below to be filed by Assessee.

Form of Return	Late Fees/ Amount Payable	Who is required to file	Time limit for filing return
ER-1[Rule 12(1) of Central Excise Rules]	Monthly Return by large units	Manufacturers not eligible for SSI concession	10th of following month
ER-2[Rule 12(1) of Central Excise Rules]	Monthly Return by EOU	EOU units	10th of following month
ER-3[Proviso to Rule 12(1) of Central Excise Rules]	Quarterly Return by SSI	Assessees eligible for SSI concession (even if he does not avail the concession)	10th of next month of the quarter
ER-4[rule 12(2) of Central Excise Rules]	Annual Financial Information Statement	Assessees paying duty of Rs one crore or more per annum either through PLA or Cenvat or both together.	Annually by 30th November of succeeding year
ER-5[Rules 9A(1) and 9A(2) of Cenvat Credit Rules]	Information relating to Principal Inputs	Assessees paying duty of Rs one crore or more per annum (either through PLA or Cenvat or both together) and manufacturing goods under specified tariff headings	Annually, by 30th April for the current year (e.g. return for 2005-06 is to be filed by30-4-2005].
ER-6 [Rule 9A(3) of Cenvat Credit Rules]	Monthly return of receipt and consumption of each of Principal Inputs	Assessees required to submit ER-5 return	10th of following month
ER-7 [Rule 12(2A) of Central Excise Rules]	Annual Installed Capacity Statement	All assessees, except manufacturers of biris and matches without aid of power and , reinforced cement concrete pipes	Annually, by 30th April for the previous year (e.g. return for 2010-11 should be submitted by30-4-2011
ER-8 [Sixthproviso to Rule 12(1) of CE Rules]	Quarterly return	Assessees paying 1%/2% excise duty and not manufacturing any other goods	Quarterly within 10 days after close of quarter
Form as per Notification No. 73/2003-CE(NT) [Rule 9(8) of Cenvat Credit Rules]	Quarterly return of Cenvatable Invoices issued	Registered dealers	By 15th of following month
ST-3 [Rule 9(10) of Cenvat Credit Rules]	Half yearly return of Cenvat credit distributed	Input Service Distributor	Within one month from close of half year

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