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,