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,