Excise Duty is a tax on the manufacture of goods within the country. Excise duties are governed by the Central Excise Act, 1944, and the Central Excise Tariff Act, 1985.The term 'manufacture' has been interpreted to mean bringing into existence new article having a distinct name, character, use and marketability. Basic excise duty is levied at a uniform rate of 16 percent. In addition, special excise duty is levied on a few products at 16 percent. The Excise law provides for a CENVAT Credit Scheme, which limits the cascading effect of duty incidence on a number of excisable goods that are used as inputs / capital goods for use in manufacture of other excisable goods. Under the scheme, CENVAT credit can be claimed on the excise duty, special excise duty, NCCD and Additional duty of customs imposed on raw materials and capital goods, whether purchased locally or imported. This credit can be utilized for the payment of excise duty on the finished product. However, the credit of NCCD can be utilized for payment of NCCD only.
Customs duty is levied on import of goods into India. A downward trend in customs duty rates has been seen over the past few years. The peak rate of basic customs duty has now been reduced to 35 percent.
The levy and the rate of customs duty is as per the Customs Act, 1962 ( the customs Act), and the Customs Tarrif Act, 1975 (the tarrif Act), respectively. Customs duty on imports comprise the following:
Basic customs duty.
Additional customs duty., and
Special additional customs duty of 4 percent.
Any or all of the above duties could be reduced / exempted for specified commodities / class of importers by the Central Government.
Service tax is levied on specified services at a uniform rate of 5 percent on the consideration for taxable services. This tax is levied on, inter alia, telephone, insurance ( other than life insurance), share brokerage services, consulting engineers, architects, management consultants, real estate agents, market research agencies, clearing and forwarding agents.
In addition to above, some other taxes imposed by Central /State Government are as follows:-
- Transfer of assets attracts stamp duty.
- Some states impose real estate taxes based on assed values.
- Municipalities levy tax on real estate in their jurisdiction and octroi on goods entering their jurisdition.
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